Dive Brief:
- Academic hospitals are facing tough negotiations with insurers, with big names like Humana and the Blues enacting steep cost-cutting measures up to and including dropping those hospitals completely from their plans, according to a piece in Crain's Chicago Business.
- Humana recently ended its 20-year-long relationship with University of Chicago Medicine, which will no longer be able to take Humana starting April 1.
- Meanwhile, Blue Cross and Blue Shield of Illinois recently advised physicians that they will be paid less if they send certain HMO patients to Rush University Medical Center, another teaching hospital.
Dive Insight:
The report claims that the ACA's focus on spending less while improving care has led insurers to drastically change how they pay physicians and hospitals, pushing preventative care over costly overnight stays and readmissions. Coordinated care efforts, the report says, have prompted more restrictive health plans, which ACA shoppers have widely accepted, just to be able to have any insurance at all. This empowers insurers to be tougher at the negotiating table, resulting in them giving teaching hospitals—not accustomed to the level of austerity promoted by the ACA—a tougher line.
Even though Humana and the Blues are not in any danger of closing their doors, they are facing slower growth in earnings, with Humana revising projections three times already over the last year, according to their page on the NASDAQ site.
"This is really a cost play," Nancy Daas, a partner at Chicago-based health benefits consultant CMC Advisory Group, told Crain's.
Teaching hospitals are an important part of the healthcare firmament, whose role as providers of patient care is only a part of their charters. They exist for research, discovery and training, which are as important to the future of healthcare as coordinated care, population health and reducing utilization and costs. Some advocates claim that for insurers to start treating them as simply another provider to pay is to be inconsistent with the importance of their roles. If payers are determined to take this course, teaching hospitals may need to solicit other funders to step in and help the academic medical centers continue their historic mission.
