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Shortfall In Hospitals’ Pay

by Medindia Content Team on June 1, 2006 at 7:56 PM
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Shortfall In Hospitals’ Pay

According to a study by Premera Blue Cross, it was found that Washington employers were paying more than $1 billion to cover shortfalls incurred by hospitals and doctors serving Medicare and Medicaid patients in 2004.

Gubby Barlow, chief executive officer of Mountlake Terrace-based Premera, says 'Some call it Medicare and Medicaid cost-shifting. Others call it a hidden tax'. Thus it seems to be a billion-dollar burden for Washington employers and policy-holders, and that burden is growing daily. Overall, the study done for Premera estimates that almost $1.4 billion in medical care costs - $738 million in hospital costs and $620 million in physician costs - were shifted to Washington employers and other commercial customers in 2004.

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That cost to employers equaled $902 per family health insurance contract, representing 13 percent of all commercial hospital and physician costs, according to the study compiled by Milliman Inc., a consulting and actuarial firm.

A study carried out by Milliman Inc., a consulting and actuarial firm shows that payment margins from Medicare to hospitals fell to a 15.4 percent loss in 2004 from a 3 percent gain in 1997.
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Bob Perna, director of health care economics for the Washington State Medical Association, said: The problem is that the government-set fees paid to doctors and hospitals through Medicare and Medicaid which usually don't match up with the actual costs.

The Washington State Medical Association found that about 65 percent of doctors in the state's urban areas stopped accepting Medicare and Medicaid patients.

To create a true solution to the crisis, a long list of organizations, including the state's biggest health insurers, the Snohomish County Economic Development Council, the Association of Washington Business and the Washington Health Care Forum were in need to take steps and do study.

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