Clash of the titans: Hospitals vs. health plans

Big hospital systems are battling insurers harder than ever to get the reimbursement they want. And plans are battling back by blaming hospitals for rising premium costs.

By Bob Cook, AMNews staff. Dec. 23/30, 2002.

Like the 97-pound weakling in the old Charles Atlas comic-book ads, some hospitals have built up their muscles and come back to dominate the managed care plans that once kicked sand in their faces.

From Long Island, N.Y., to Seattle, San Jose, Calif., to Pittsburgh, and Washington, D.C., to Chicago, hospital systems built up by consolidation are telling health plans -- often, in a very public way through local media campaigns -- that it's payback

For example, UPMC Health System in Pittsburgh, after months of public bickering with Highmark Blue Cross Blue Shield, was able to get a 21% hike in reimbursement (Highmark offered 8%), plus $300 million to make up for past "underpayments," and $233 mil

Highmark controls 65% of the commercial insurance market, but UPMC has 42% of Pittsburgh and Allegheny County's hospital beds, as well as three of the four hospitals listed in the U.S. News and World Report rankings and the city's major academic

"The balance of power has shifted considerably now, especially in regions where there are only one or two [hospital] systems," said David Webster, a health care consultant in Bethlehem, Pa. The reason, he said, is that even though health plans may domi [...]