Cost-shifting - the practice of seeking higher reimbursement from some payers and patients to cover shortfalls due to low or no reimbursement from others - is rampant in the US health care system. Having worked with providers, health care systems, and payers, I can attest to the pervasive nature of the beast - it happens all the time, everywhere.

More evidence came across my virtual desk yesterday in the form of a study by the Insurance Research Council entitled "Hospital Cost Shifting and Auto Injury Insurance Claims" [available for purchase thru IRC]. The study compared auto injury hospital costs in Maryland to those in 38 other states that don't have the all-payer hospital rates mandated in Maryland. Thus, whether a patient is covered by a health plan or auto insurer in MD doesn't matter - all are reimbursed at the same level.

Here are a few of the highlights.

- the "percentage of a state's population without health insurance was found to be the strongest predictor of avearge hospital costs for auto injury claimants"

- "another important predictor of average hospital costs for auto injury claimants is the percentage of a state's population covered by Medicaid"

- IRC estimated of the impact of cost shifting to auto insurers totaled $1.2 billion in 2007.

It is clear that cost shifting is rampant, particularly to property and casualty payers. Work comp payers are particularly vulnerable as their network arrangements are under growing pressure from hospitals seeking higher reimbursement.

What does this mean for you?

Your hospital costs are headed up. What are you going to do about it?