A group of unions that provide health coverage to hundreds of thousands of New Yorkers are banding together to try to bring down hospital prices. The costs can be passed on to their members, many of whom are in low-income jobs.
The Coalition for Affordable Hospitals was launched Friday morning and held a rally in City Hall Park in Manhattan ahead of a city council hearing on hospital costs. The effort includes nine unions representing New Yorkers as well as the New York State Council of Churches and PatientRightsAdvocate.org, a nonprofit that promotes transparency in healthcare pricing. The group is pushing legislation in Albany that would give health plans – including those run by unions – more leverage to haggle over the price of health care.
New York City has in recent years become dominated by a handful of large private hospital systems that have expanded their reach by buying out independent hospitals, doctors’ offices and other types of health care providers. Each of these systems now has a significant market share and more power to get health insurers to pay whatever they ask for in contract negotiations. In 2018, the state’s five largest hospital systems, all based in the New York City area, managed nearly half – 46.5% – of acute care hospital beds statewide.
New York hospitals that are part of a large system tend to charge higher prices. Per capita spending on hospital care in New York City increased by about 30% between 2013 and 2017, according to a report from the New York State Health Foundation. While part of the increase centered on more people using hospital services, the price increases were largely to blame.
“We are launching this campaign here because the days of our members being held hostage here in New York by predatory hospital prices are drawing to a close,” Kyle Bragg, president of 32BJ SEIU, which represents 200,000 construction workers. in the region, said at the rally.
Bragg, other union leaders and politicians have denounced both rising hospital costs and the fact that prices for the same procedure can vary widely depending on where a patient is being treated and the type of insurance they are receiving. has.
Protesters called NewYork-Presbyterian a particularly egregious offender. The 32BJ union plans to remove the hospital system from its network next year citing uncontrollable costs. On average, the hospital system charges the 32BJ Health Fund prices that are more than 3.5 times the prices Medicare pays for the same care in the same facilities, the union determined by examining data on health care claims. members.
“Every dollar we spend on hospitals is a dollar that doesn’t go into our members’ pockets, into their salaries or into their benefits,” Bragg told people gathered at the rally.
NewYork-Presbyterian responded to claims they were overcharging with a statement: “We care about everyone who walks through our doors, regardless of their ability to pay. All New Yorkers deserve the best care, and we are continually focused on maintaining our patients’ access to the providers they trust. “
Postpone hospital consolidation
In general, consolidation of hospitals in the United States has been shown to increase the cost of care without necessarily improving the quality.
The Coalition for Affordable Hospitals is supporting a bill in the State Senate and Assembly known as Hospital Equity and Affordability Legislation, or HEAL. The group hopes to eliminate some anti-competitive practices and give health plans more leverage to negotiate prices with the health giants. The bill was introduced in June, near the end of the last legislative session, and has yet to gain much ground, with only one sponsor in the Assembly and three in the Senate so far.
One provision would prohibit “all or nothing” clauses. It is then that a hospital system requires that an insurance plan include either each establishment that it represents in its network, or none of them. The bill would make it easier for a health plan to dismiss certain hospitals or health care providers, which could theoretically increase competition and reduce costs.
“There has been a growing level of concern about these anti-competitive clauses that hospital systems are inserting into their contracts with payers,” said Sabrina Corlette, co-director of the Center on Health Insurance Reforms at the McCourt School of Public Policy at Georgetown University. .
Sutter Health, a large California hospital system, recently agreed to end its “all-or-nothing” practices as part of a settlement in a lawsuit filed by health insurers. The full impact of the deal, which was finalized in August, remains to be seen, but experts believe it could lead to similar legal cases across the country.
Hospitals are barely breaking even because of all the high costs during the pandemic.
Corlette said she was optimistic about the potential of this type of measure to help insurers cut expenses, which could potentially translate into lower premiums and out-of-pocket expenses for members. “Anything you can do to give them a little more weight helps,” she said.
At Friday’s hearing on hospital fees, city council members Mark Levine, Carlina Rivera and others called on hospitals for putting money on patients. David Rich, president of the Greater New York Hospital Association, appeared to become emotional, arguing that it was inappropriate to criticize hospitals that saved lives during the COVID-19 pandemic.
“Hospitals are barely breaking even because of all the high costs during the pandemic,” Rich said. “The for-profit insurance companies, which are supposed to work with hospitals … are making billions and billions of dollars.”
He added that hospitals face the high cost of equipment, pharmaceuticals and employee benefits, among other expenses, and often operate on low margins.
“Shifting the responsibility for health care costs to hospitals is extremely short-sighted,” said Rich. “Hospitals face the same cost pressures as everyone else in the healthcare industry. “
The bigger picture
While eliminating all-or-nothing clauses could reduce costs for some insurers, it would not address the root causes of the disparate – and sometimes exorbitant – prices for hospital services in the current health care system.
Part of the reason employers or unions are billed so much is because hospitals compensate for the lower rates they charge public health plans under Medicare and Medicaid. This increases out-of-pocket expenses for people on employer-sponsored plans, while also fueling inequalities in the healthcare system, as hospitals woo people with commercial medical coverage.
Some health care reform activists say the answer is a single payer system in which the state or federal government covers health care for everyone. When asked if he supports the one-time payment, Bragg told WNYC / Gothamist that he is currently focusing on hospital pricing.
Another option is a solution similar to Maryland’s All Payers System, which sets uniform rates for hospital services, regardless of a person’s type of coverage. But such drastic measures may be less politically viable than those currently proposed.
“As you can imagine, [rate-setting] is politically very difficult to do for most states, ”Corlette said, noting that lobbyists for New York City hospitals wield a lot of power.
The New York Health Plan Association also backed measures to curb anti-competitive practices in testimony it submitted at Friday’s city council hearing, although a spokesperson for the organization said it ‘she had not had the opportunity to review the specific legislation of the Coalition for Affordable Hospitals. supports.