Dallas-Fort Worth Hospitals Keep Racking Up The Big Bucks

Higher market share often translates into greater leverage in contract negotiations with insurance companies. That can go beyond higher prices, too.

Blue Cross Blue Shield of Texas, which has over 5 million members, got in a contract fight with a major hospital system last year. Many assumed it was over reimbursements, but it was actually over “a single paragraph” to prevent Blue Cross from steering patients to lower-cost providers, an official said a few months ago.

“Under the terms, the hospital system could have imposed higher charges for Blue Cross members “every time someone walks in the door,” said Dr. Paul Hain, president of the insurer’s North Texas market. “Blue Cross has drawn a big, bright line in the sand. We will never sign that contract,” Hain told the Dallas-Fort Worth Business Group on Health.

Hain said this was happening around the country and he urged employers to stand with their insurance companies during contract negotiations.

“That’s likely a hard sell, even if it’s in the employers’ interest. Workers generally dislike changes to their health coverage, especially if they may have to change providers,” Baumgarten said.

In a booming economy like Dallas, the fear of upsetting workers — and maybe losing them over a benefits change — is greater than the fear of rising health costs. Companies still cover a majority of the costs for their employees’ health insurance, although the workers’ share has been growing fast. Higher deductibles and copayments, along with rising premiums, are eating up more of the family budget.

Over half of Texans said it was difficult for them to afford health care in a 2018 survey by the Kaiser Family Foundation. More worried about covering health costs than paying rent, utilities and transportation and buying food, the survey found.

In Texas, 38 percent of respondents said they had problems paying medical bills in the previous year; in the U.S., the share was 27 percent, the survey said.

“By switching to a narrow network of providers — and perhaps excluding one of the large hospital systems — a company health plan could get lower prices. But those deals have been available for years,” Baumgarten said. “For the most part, employers have been very reluctant to do that — and providers know it.”