Update: CIGNA & Bon Secours Mercy Settle Network Dispute
As We Expected...
Two quick follow ups on yesterday’s piece, “No Honor Among Thieves”, about the absurdity of antitrust lawsuits between hospitals and insurance companies. Dozens of hospitals who claim to have lost money to a price fixing conspiracy among Blue Cross Blue Shield insurers flex their own monopoly muscle in network rate negotiations.
Contracts for preferred provider status between CIGNA and $13.3 billion, 50 hospital Catholic chain Bon Secours Mercy Health expired yesterday in Ohio. They settled this morning.
In Ohio, Bon Secours Mercy holds the largest market share in the Springfield MSA (100%!), Lima (72%) and the Youngstown-Warren-Boardman area straddling the Pennsylvania border (60%), according to AMA research. The company is second largest in the Toledo area (23%). Those hospital markets are all “highly concentrated” by the Department of Justice’s guidelines. Although Cincinnati - with 2.3 million residents - was one of the few U.S. metro areas not considered “highly concentrated” by the AMA researchers, Bon Secours’ 25% market share is that area’s largest too.
The parties reached a PPO network rate agreement this morning “after months of negotiations and tens of thousands of people at risk of being out-of-network,” according to Fox 19 Now in Cincinnati. WTOL 11 in Toledo reported that the “exact nature of the deal reached by both companies was not provided.”
This happens over and over again across the country. Hospitals say insurers are offering rates below the cost of care while insurers accuse hospitals of price gouging. They blame each other for the threat of patients losing access to doctors and facilities. After months of public anxiety, they settle just before or shortly after the deadline. Network access continues and the combatants keep their truce terms secret. Premiums, deductibles, copays and coinsurance go up and patients keep skipping care because they can’t afford it.
One twist we forgot yesterday. Leaders of both industries do agree on one thing - fighting to stop patients from getting health care without going bankrupt. For all their widely publicized antagonism in court and at the bargaining table, hospitals and insurers have both spent millions of dollars lobbying and running public relations campaigns to defeat Medicare for All.