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HCA, UnitedHealth Group go head-to-head over pay rates

Contract negotiations between the health care giants in two large markets fail, putting patients and their physicians in a bind.

By Katherine Vogt, amednews staff. Sept. 25, 2006.

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This time of year, it's common to hear some saber rattling between large hospital systems and large health plans over negotiations on reimbursement. But HCA and UnitedHealth Group aren't just making noise -- in a few major markets, they've broken off ties. Now physicians and patients are the ones being rattled.

As August came to an end, the companies failed to reach new contract agreements in Colorado and South Florida, forcing thousands of patients and their physicians to look elsewhere for facilities in which they could receive or give in-network care. Analysts -- and physicians -- fear this fight might portend more clash-of-the-titans battles between big corporate health plans and big corporate hospitals. Especially because, in the case of HCA, it needs to raise a lot of money to pay off the enormous debt service on its recently announced $33 billion leveraged buyout.

"These standoffs serve as potent examples of the irrational and unbalanced nature of the current process of contracting with health plans, which creates the kind of standoff we are seeing in Denver, Florida and other places. Brinksmanship like this does not benefit the provision of health care. Ultimately, patients and physicians pay the price in terms of new barriers to obtaining needed care," said Jeremy Lazarus, MD, vice speaker of the AMA's House of Delegates and a psychiatrist from Denver, in a prepared statement.

United has 850,000 members in Colorado, while HCA, which operates as HealthOne in the state, controls nearly 40% of the hospital beds in the Denver area. In the Miami and Tampa Bay, Fla., areas, United has nearly 1.2 million members, though HCA's market share is smaller than it is in Denver. The HCA-United contract in Colorado expired Sept. 1; the one in Florida expired Aug. 29.