Greedy Insurers Shaking Down Greedy Hospitals! Patients Win?

Health care reform opponents always forget this important fact: Insurance companies are profit making middlemen that don't provide health care treatment. What they want is not important. What doctors and hospitals want is important.

Bolstered by the sudden defeat of reform in congress, insurers are now tightening their grip:

NY Times: A front in the national health care battle has opened in New York City … The fight is between Continuum Health Partners, a consortium of five New York hospitals, and United Healthcare … have been in bitter contract negotiations … over United’s demand that the hospitals notify the insurance company within 24 hours after a patient’s admission (or they) would cut its reimbursements for the patient by half. United is negotiating or imposing similar rules at hospitals across the country

Jeffrey Rubin, an economics professor at Rutgers University said United’s approach … “It’s an example of the insurance company getting between you and your doctor,” Dr. Rubin said.

United Healthcare has sent letters … to tens of thousands of patients, warning that they could be cut off from coverage at Continuum hospitals and affiliated doctors, and advising them to start shopping for new ones.

In a case of the pot calling the kettle black, the unnecessary insurance company's role as middle man is claiming they're the victims of greedy hospitals (a true accusation):

United Healthcare’s New York chief executive, William
Golden, said … that the tension had been fanned by a greedy and intransigent
hospital system that had been seeking unseemly rate increases of more than 40
percent.

The hospital chain said United (demanded) a 7 percent to 10 percent cut (and) wanted to … reduce the amount of time patients stay in the hospital, which is associated with complications like infection, and to prevent readmission, a major cost. “Absolutely, honestly, sincerely, this is a genuine attempt to try to improve outcomes for patients,” he said.

But Ruth Levin, Continuum’s chief contract negotiator, said that the hospital chain did not believe that United Healthcare could do a better job of reducing readmissions than its own medical staff could. “When we say, ‘Show me where you went to medical school,’ then they back down,” she said.

Integris Health, an 11-hospital system based in Oklahoma City, has tried to meet the notification requirement and has been frustrated by the administrative burden, even using electronic notification .. said Greg Meyers, VP for revenue integrity, “That doesn’t feel to us like cost control, it feels like a revenue stream enhancement to the insurance companies.”