Managed Care Matters

The increasing consolidation in the health insurance market is beginning to run up against the same situation among health care providers, creating the market condition known as a bilateral oligopoly (few sellers and few buyers). This appears to be happening in Denver, where UHC is battling HealthOne over contract terms, reimbursement and likely other sticky issues.

There are two points here.

First, according to several sources, HealthONE is an excellent system with enviable outcomes; therefore is entitled to ask for better reimbursement than lower-performing systems. One of those sources is UHC itself. Here's a quote from the press release

""Interestingly, HealthONE hospitals earned the highest quality rankings among Denver metropolitan hospitals for a majority of procedures evaluated in UnitedHealthcare's first ever-report card, released in June of this year," said Patrick Powers, HealthLeaders-InterStudy senior analyst. "These report cards are part of UnitedHealthcare's new pay-for-performance initiatives, which should translate into improved rates for high quality hospitals." That's only half of the story, as we aren't privy to the rates UHC is offering and HealthONE is demanding. That said, HealthONE seems to have a strong case for strong rates.

Second, while a "bilateral oligopoly" may send you (and certainly sent me) scrambling for the e-dictionary, the net is the big players do battle while the consumers try not to get trampled underfoot. Here we have a very large insurer and a very large provider fighting over rates and access, while the consumer waits anxiously for these behemoths to resolve (or not) their squabbles.

Reminds me of the old joke about what you find between elephants' toes.

Slow running natives.