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Posturing or preservation – What are hospitals’ true motives?

Posturing or preservation – What are hospitals’ true motives? November 8, 2013Leave a comment

Marketing, research and business development consultant in healthcare, human services and senior living.

The maneuvering regarding implementation of the Affordable Care Act (ACA – “ObamaCare”) has ratcheted up a level. Recent news articles about hospitals declining to accept insurance purchased through state exchanges – especially high profile academic medical centers – seems dramatic. Is this a gesture by concerned hospitals about their financial survival, or public relations initiatives to protect their marketplace pricing advantages?

Hospitals took a major “haircut” in ACA – rates were severely curtailed. This seemed an acceptable bargain as hospitals were to have available a pool of 32 million new customers with subsidized private health insurance. This large new pool has been shrinking, however and the prospect of adverse selection has further dimmed the prospect of the market boon which had existed when ACA was passed in 2010.

But hospitals are far from homogeneous. And what is good for one may be very bad indeed for many others.

Academic medical centers are important thought leaders in domestic and international healthcare services. They represent the very best of American healthcare. They are also highly profitable local institutions with enormous political and economic clout. They are often among the largest employers in a local marketplace area, and have heavyweight political clout. Their ability to manipulate local pricing was recently featured in an article in Time magazine.

In some states, hospitals cannot discriminate; where they can, however we can anticipate more careful health insurance plan approvals. Some hospitals truly are having difficult financial times. Others are highly profitable. With millions of new consumers coming online very shortly, hospitals are both eager to absorb this new clientele, and wary of taking further cuts in payments.
There will no doubt the much more maneuvering in the months ahead.

Marketing, research and business development consultant in healthcare, human services and senior living.

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