Shifting costs from public to private payers
December 11, 2008
Shifting costs from public to private payers
By Charlie Baker
The other day, the American Hospital Association, the Blue Cross / Blue Shield Association, Premera Blue Cross and America’s Health Insurance Plans (FYI - HPHC is a member and I’m on the Board of AHIP) released a joint study on public and private payment rates.
The study was prepared by Milliman, Inc., one of the nation’s most well known number-crunching health care consulting firms. Readers of this blog will not be surprised to learn that the study shows that Medicare and Medicaid pay a lot less for health care services than the Blue Cross and private health plans pay. But I must say, even I was a little surprised by the size of the differential.
The Milliman data - which is actually 2006 for hospitals and 2007 for physicians - which means IT’S WORSE NOW - calculates a $90 BILLION cost shift from the public payors and onto the private plans. More specifically, Milliman indicates the cost shift is worth a $51 billion differential in hospital payments, and a $40 billion differential in payments to physicians.