Insurers Reveal Wide Variation in Negotiated Prices

A first-time national release of negotiated prices for certain elective procedures by a large group of insurers demonstrated wide price variation, both nationally and within local markets.

A report by the Blue Cross Blue Shield Association and Blue Health Intelligence found the charged cost of knee and hip replacement surgeries—two of the fastest-growing procedures—varied widely.

The report used claims data from Blue Cross and Blue Shield companies in 64 markets to conclude that the average cost for an uncomplicated total knee replacement procedure was $31,124. But individual hospital charges to participating insurers for the procedure ranged from $11,317 in Montgomery, Ala., to $69,654 in New York City.

An example of extreme cost variation within a market was the cost of a total knee replacement in Dallas, which ranged from $16,772 to $61,585 at various hospitals, according to the report.

Hospitals have cited a range of factors that drive price variation, including differing shares of uncompensated care and bad debt, their ratio of publicly insured patients, and local variations in their own costs.

The new report is the first such broad price comparison by Blue Cross Blue Shield (BCBS), which previously created a hospital designation system to help consumers identify 427 relatively cost-efficient facilities for […]

By |January 24th, 2015|Industry News|Comments Off

The 10 Percent Problem

Future health insurance marketplace premium increases likely to reach double digits
Health plans setting their premiums for the public health insurance marketplaces have faced one of the most challenging pricing scenarios in recent history. A new set of rating rules, a competitive environment, and ambiguity around enrollee populations collided to create unprecedented uncertainty. While the Affordable Care Act (ACA) established three programs – risk adjustment, risk corridors, and reinsurance – to address some of this uncertainty, two of the programs will expire after 2016. The end of the risk corridors and reinsurance programs – coupled with growing health care utilization and higher costs due to the increasing annual, non-deductible fee on health plans – could make significant premium increases inevitable in the future. Deloitte’s health actuarial practice modeled the effect of the risk corridors and reinsurance programs’ expiration on health plan premiums over the next three years. The analysis was based on simulations using Deloitte’s Health Care Reform Premium Stabilization Projection (HCRPSP) model, which incorporates multiple variables affecting premiums, including cost trend, policy, and marketplace factors. The bottom line: Premium increases of 10 percent or more could be likely as health plans prepare for the end of the two programs […]

By |January 22nd, 2015|Health Reform|Comments Off

HHS issues 2015 Federal Poverty Guidelines

The Department of Health and Human Services has issued the 2015 notice detailing Federal Poverty Guidelines. The guidelines are roughly equal to the poverty thresholds for calendar year 2014 which the Census Bureau expects to publish in final form in September 2015. For the 48 contiguous US states and DC, the poverty guideline for a household of one individual is $11,770, and for two individuals $15,930.  The complete guideline can be found in the Federal Register for January 22, 2015: Fed Register-FLP 2015-01120

By |January 21st, 2015|Health Reform|Comments Off

 

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