As the cost of medical services and medicines rises, more Americans are putting off health care longer.
Last year, the number of Americans who reported delaying treatment because of cost hit a 20-year high, with nearly four in 10 Americans delaying treatment because of cost, according to a Gallup poll. I answered.
Some professionals and insurance companies are responsible for hospitals and their ability to set prices in the markets they dominate. Meanwhile, hospitals and industry groups say the price increases are the result of low reimbursements from insurance companies, forcing patients to make up the difference, as well as material to employee competition and supply chain issues. We recognize that this is the result of increased procurement costs.
Nationally, annual private health care spending increased more than 9% in Q1 2021 compared to Q1 2022. Latest Report on Medical Costs in Virginia It was released in January by Altarum, a health nonprofit. Prices for hospital services rose he 227.2% between January 2000 and December 2022, and overall inflation he 76.1%. According to Bureau of Labor Statistics data and a review by the American Enterprise Institute,
According to the report, Virginia’s health care costs are on par with the national average, even though health care costs per capita are lower than the national average.
Since 2008, annual premiums for single adults have increased by more than 74% and for families by about 79%. Meanwhile, the combined average premium and deductible have increased by more than 89% for singles and more than 91% for families.
In 2021, the average family premium for private sector employers was $21,300, while the average individual premium was $7,300. People in Virginia reportedly spend less on health care annually than the average American, say $700 less on hospital services and $200 less on prescription drugs, according to reports. .
An example of the dynamics between hospitals and insurance companies is the development at Hampton Roads. Optima, Sentara’s insurance arm, and Bon Secours Mercy Health systems are in negotiations for a new contract that will cover reimbursement for services and more. If the two sides do not reach an agreement, people with Optima insurance will have to pay significantly more for medical care at Bon Secours facilities.
One of the loved ones of 65-year-old Joan Hurdle of Richmond is one of the 54,000 Virginians affected if care at a Bon Secours facility goes off-network.
She said these providers would cause serious financial problems if they were to leave the network of people like her loved ones.
“It’s the patients who get caught in the shootout,” Hurdle said.
Aubrey Raine, who served as Treasury Secretary in the administration of former Governor Ralph Northam, said the effects of the pandemic and inflation will hit the health care sector in the coming years.
Layne said Sentara raised nurses’ salaries at least three times last year, but couldn’t pass on the costs until the insurance company’s contracts were renewed.
“I think there is no doubt that there are attempts to push the cost increases. “But let me point out that not only are costs going up, they’re going up. It’s also devaluing your purchasing power.” ”
Hospitals were impacted by a short-term suspension of some procedures, offset by direct payments from the federal government, reimbursements for COVID-related costs, and additional reimbursement rates for Medicaid patients. According to Reese Jackson, president and CEO of Chesapeake Regional Medical Center, the period has been profitable for insurers.
“It helped insurers. For insurers, it was like a period of windfall with the same amount of premium paid each month and artificially low utilization due to the pandemic environment. It’s something,” Jackson said. .
Layne said struggling hospitals have many issues and a change in operating model is needed to remain viable.
A third of Virginia’s 30 rural hospitals are at risk of closing because they are underpaid for the services they provide. A recent report by the Center for Healthcare Quality and Payment Reform.
“They have no power over what is happening in the industry,” Raine says. “And that’s unfortunate, but that’s what’s happening. Unless the federal government intervenes, it’s going to be a tough fight for them.”
He said Sentara is growing in line with other organizations.
“We’re the largest in Virginia, but pale in comparison to Anthem and Blue Cross ($100 billion in revenue) or Kaiser,” says Layne. “That’s what’s happening. These big institutions, these bigger institutions, have a lot more purchasing power and they’re using it.
Insurers are also likely facing higher costs, said Raine, but believes they are overstating the impact.
“We’re big enough to keep the Blue Cross and Anthem and their people honest, quite frankly,” Layne said. “We firmly believe that in order to bring costs down, we need to bring costs down for consumers on both the plan and provider side.”
“The only way we can compete with these big companies, especially the big insurance companies, is by getting bigger. It’s us.”
Historically, pharmacy and drug costs have been among the most difficult to manage, according to Jordan Vidor, vice president of health planning for the Eastern region of Anthem/Blue Cross Blue Shield. Labor is also a factor in general inflation and costs.
He said there are many data points that insurers refer to when entering into negotiations with the system. This includes price indices, historical tariff agreements, market averages of costs to specific zip codes, and more.
Vidor said size isn’t the only factor in the system’s bargaining position with insurers, but so are Medicare and Medicaid patient shares, potential alternatives to elective procedures, and other factors. Also, in rural areas, hospitals have a solid bargaining position as insurers want to provide coverage in those areas.
“The negotiating dynamics and bargaining power of providers often come into play in areas with fewer options,” said Vidor.
vidor said competition is good Monopolies and consolidation are issues in this area as they drive down healthcare costs. He said it was important to have more competition, control and protection for large hospital mergers and subsequent contract mergers.
“The reality is that you can’t build a double-digit company that’s primarily a public company in biotech, pharmaceuticals, medical devices, etc. We don’t,” Jackson said.
He said many groups cannot even negotiate with companies such as Medicaid, Medicare and Tricare. You cannot negotiate with providers such as
“Do you think I can negotiate the price better than Centara? The world doesn’t stand a chance,” Jackson said.
Labor shortages, with many health care providers retiring or burning out, are also driving up hospital costs significantly, Jackson said.
“We were getting to the point where we couldn’t even get a contract nurse,” Jackson said. “They were all going to Florida for $200 an hour, so I wanted one for a while and couldn’t find one.”
The median American nurse said she earned more than $37 an hour last year. to recent data From the Bureau of Labor Statistics.
According to Jackson, the people most affected by rising health care costs are those who are forced to buy insurance, mostly lower-middle-class Americans and those who work for smaller employers.
“If they don’t have affordable workplace insurance and don’t have access to government plans, they’re in a world of hurt,” Jackson said.
According to Brian Miller, Ph.D., a health care researcher and American Enterprise Institute Fellow who works at Johns Hopkins Hospital, insurance companies are trying to become financial managers of their customers, and they can trade on cost, quality and access. must be turned off. Washington-based think tank.
“In doing so, health insurance faces a monopoly or highly concentrated delivery market in an increasing number of geographies,” said Miller. “And the result is that this very large corporate health plan is being held hostage by a small, localized delivery system that is the complete opposite of the David and Goliath (narrative) traditionally expected. There is a possibility.”
He said this kind of situation is not only in small communities, but also in large metropolitan areas.
“Usually you don’t want to cross town to get to the hospital,” says Miller. “So, health plans that are big companies are often not negotiable at the local level.”
He said joining a larger group could help answer many of the small hospital’s questions about the future.
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“That doesn’t mean it’s the right path for the company’s business or life cycle or the community to which it belongs,” says Miller. “But it’s an easy choice for management and the board.”
“I think health insurance prices will continue to rise, but the health insurance market reflects the prices of the products and services that make up health insurance,” said Miller. “Health care provision, hospitals and clinics make up 51% of his costs, and when almost all of these markets are concentrated or monopoly markets, consumers pay the price of monopolies.”
Rising medical costs Increased share of the US economy That’s because prices continue to rise faster than anything else, said James Gelfand, chairman of the ERISA industry committee and former Republican Senate staffer and chamber of commerce lobbyist.
“These costs are always out of control, and nothing Congress has really slowed it down,” Gelfand said.
He said the government has provided trillions of dollars in aid to hospitals and demanded that hospitals pay nurses’ salaries and more.
“So if the hospital’s earnings were flat last year, and this year’s earnings are worse, what will this year look like?” Gelfand said. “So they’re being forced to claim more money and find ways to get more money from patients and insurance companies to meet their revenue targets. It’s just a self-nurturing phenomenon.”
Ian Munro, 757-447-4097, [email protected]
