Health Insurance Industry and For-Profit Hospitals Try to Hide Fault and Shift Blame
Washington, DC – Facing the prospect of meaningful and comprehensive health care reform, two insurance industry front groups and the hospital lobby tried to make the case today that our nation’s public health insurance plans are to blame for the insurance industry’s own bad practices and greed.
CEOs from America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association, and the American Hospital Association backed a report claiming “inadequate Medicare and Medicaid payments” are why health care costs are so high, ignoring the reality that health insurers and hospitals themselves have the power to set prices high, and they do so to maintain enormous profits.
According to the AHA itself, the country’s community hospitals saw “the largest single-year jump in profit margins in at least 15 years” (PDF) in 2007, posting $43 billion more in revenue than expenses. At the same time, the top seven for-profit health insurers had combined profits of $12.6 billion in 2007, an increase of 170.2% from 2003.
“Where public health care plans, like Medicare, have competed directly against private plans, they have almost always had lower costs,” said Dean Baker, Co-Director, Center for Economic Policy and Research. “Remarkably, the private insurance sector is now blaming the public plans for being more efficient. It is understandable that the private sector plans would prefer to make public sector plans less efficient so that they can more effectively compete, but the public has no interest in wasteful health care spending.”
The Milliman study commissioned by the insurance and hospital lobbies and released today also utilizes flawed methodology to draw its conclusions. In demonizing public health insurance programs, it combines Medicare – a federal public insurance program covering everyone – with Medicaid - a program for poor people. Medicare pays generally good rates (although sometimes not as high as some providers would like) while Medicaid rates are set by cash-squeezed states. Also, the study does not assess whether hospital costs and provider payment levels are too high because of inefficiencies, waste, and a desire to make significant profits.
“Everyone agrees that we need cost controls, but when Medicare does a good job, insurers and hospitals complain," added Richard Kirsch, National Campaign Manager, Health Care For America Now (HCAN). “Health insurers and for-profit hospitals are getting desperate and crying wolf. Don’t believe the sob story. They’re unwilling to compete on price and quality. They refuse to tell us what they charge and how much it actually costs to provide services. They will do everything they can now to blame everyone but themselves for their failure to put our health above their enormous profits. They would charge as much as the market would bear regardless of whether Medicare or Medicaid or any other public plan was in the mix. Insurers are facing the prospect of having to compete on a level playing field for the very first time, and they’ll say anything to protect their bottom line.”
CEOs from America’s Health Insurance Plans (AHIP), the Blue Cross Blue Shield Association, and the American Hospital Association backed a report claiming “inadequate Medicare and Medicaid payments” are why health care costs are so high, ignoring the reality that health insurers and hospitals themselves have the power to set prices high, and they do so to maintain enormous profits.
According to the AHA itself, the country’s community hospitals saw “the largest single-year jump in profit margins in at least 15 years” (PDF) in 2007, posting $43 billion more in revenue than expenses. At the same time, the top seven for-profit health insurers had combined profits of $12.6 billion in 2007, an increase of 170.2% from 2003.
“Where public health care plans, like Medicare, have competed directly against private plans, they have almost always had lower costs,” said Dean Baker, Co-Director, Center for Economic Policy and Research. “Remarkably, the private insurance sector is now blaming the public plans for being more efficient. It is understandable that the private sector plans would prefer to make public sector plans less efficient so that they can more effectively compete, but the public has no interest in wasteful health care spending.”
The Milliman study commissioned by the insurance and hospital lobbies and released today also utilizes flawed methodology to draw its conclusions. In demonizing public health insurance programs, it combines Medicare – a federal public insurance program covering everyone – with Medicaid - a program for poor people. Medicare pays generally good rates (although sometimes not as high as some providers would like) while Medicaid rates are set by cash-squeezed states. Also, the study does not assess whether hospital costs and provider payment levels are too high because of inefficiencies, waste, and a desire to make significant profits.
“Everyone agrees that we need cost controls, but when Medicare does a good job, insurers and hospitals complain," added Richard Kirsch, National Campaign Manager, Health Care For America Now (HCAN). “Health insurers and for-profit hospitals are getting desperate and crying wolf. Don’t believe the sob story. They’re unwilling to compete on price and quality. They refuse to tell us what they charge and how much it actually costs to provide services. They will do everything they can now to blame everyone but themselves for their failure to put our health above their enormous profits. They would charge as much as the market would bear regardless of whether Medicare or Medicaid or any other public plan was in the mix. Insurers are facing the prospect of having to compete on a level playing field for the very first time, and they’ll say anything to protect their bottom line.”
***For more information or interview opportunities, please call Jacki Schechner at 202-454-6196***
