How Hospitals Go To War – Tenet and HCA – It’s a Hedge War with Insurers

Both links offer some good insight as to what goes on behind the scenes. As patients, we just want to be taken care of, but behind what we may see are some long political battles, ones the hospitals I’m sure would rather do without.

So why are they battling for patients, it comes right back to insurance contracts and somewhat of a bidding war, who covers what percentage, and who’s best positioned with the payment coverage. We have similar battles in California with hospitals duking it out as well, not to mention the balance billing situation that is once again being reviewed in court. Tenet and Kaiser have been in court in California over some of the same issues as far as compensation with out of network patient compensation amounts. In addition to taking care of sick patients, the insurance industry has also created one big area of distraction from the focus of better health care.

To further complicate issues, some hospitals simply do not have the funds to legally battle all the complexities and thus end up in bankruptcy, read the “Desperate Hospitals” series below for some additional information.

Last year in California, Tenet sold 5 hospitals as well to keep on top of the investor demands, and sad but true realism, hardly anyone here in the US is investing in healthcare with more going overseas, with venture capital organizations investing in building hospital chains overseas. Speaking of Venture Capital, Blue Cross has enough profits to create their own Venture Capital firm too, so read between the lines to see where the money is and where the money is not.

Why is some of this happening, party because we let some of it occur, while the insurance industry (much like Wall Street) was busy investing in business intelligence software and working on their formulas or algorithms, much of healthcare was bliss trying to focus on healthcare. This would really come down the tubes later and allow the industry to literally control how everything is done in healthcare, in other words, risk management is what runs healthcare today, not the focus of better healthcare as we are now observing a continuous downfall in all areas of healthcare when it comes to just getting taken care of. The folks that have the data and who know how to manipulate the algorithms we all use for decision making processes are still ruling the roost, while without the equivalent tools to do battle, the rest somewhat become victims, and that is us, the patients.

As reported today in the Wall Street Journal, the pressures have even continued to accelerate with hospitals with having to sign up with Experian credit services, so before services offered can be considered, they are forced to look at the algorithms or formulas provided to hedge and see what the risk factor is if a patient will be able to pay.

Some hospitals also have had to put their debt up on the auction block too. There are a couple of websites set up to do this already, and most of the time the hospital has the final say over who is awarded the big, and it may not be the highest.

I know I used this word a lot “algorithms” but those are the formulas used today for business intelligence, and what decisions are based on, so if for some reason, you may not think technology and software plays an important role today, think again as it is all around you. Do you know how much software from Microsoft goes into our cars for example, something most may not even think about, but it is all around you in almost everything you do today, so any opportunity to learn and read up, is one to take, as bliss will get you turned upside down today.

It is a shame that it has reached this point today in healthcare, when the real focus should be to take care of our citizens, but we can’t go backwards either, and thus these are the cards dealt to us by insurance companies and risk management, and thus like Wall Street, the formulas will continue to run and influence decisions until we reach bottom to where the money runs out. There are many parallels here and something we should all think about, we’re being hedged, like it or not, and the more knowledge we have to bring back to the table, the greater strength we will have. The related reading below will fill you in on some related posts from the recent past. BD

For a rare look at how hospitals compete for the commodities that really matter to them — primarily patients and their insurance coverage — check out a rough and sometimes brutal war Tenet Healthcare has waged against its larger rival HCA in El Paso, Tex., for much of the last past year.

The weapons in this case are discounts and “exclusive provider” arrangements that hospital chain use to lock in customers — in this case, El Paso County’s $10 million, self-funded public-employee health plan — and, not coincidentally, to lock out their hospital rivals. At ground zero in this battle are third-party health-plan administrators, middlemen who bear the brunt of the hospitals’ competitive positioning.

The weapons in this case are discounts and “exclusive provider” arrangements that hospital chain use to lock in customers.

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