Increasing Costs are driving Insurers and Systems Apart

Some History


A frenzy of hospital mergers into ACOs as detailed by Philip Longman and Paul Hewitt could leave many families having lesser amounts of healthcare paid for by healthcare insurance due to healthcare industry consolidation leading to higher prices.

We have seen this happen with higher prices for insurance plans, increased deductibles, and less covered. I think we have all experienced this in the last couple of years, Except, this is not a recent comment by Longman and Hewitt. It was written in 2014 and I made it a part of my post in 2021, “Increasing Hospital Prices and Insurance Payments Lead to Higher Costs” – Angry Bear.


Using information from “Here’s What’s Really Driving Healthcare Costs” | MedPage Today using data from the article “Factors Associated With Increases in US Health Care Spending, 1996-2013 | Health Care Economics, Insurance, Payment | JAMA | JAMA Network“; we found it was just the price increases stupid. “Healthcare Costs and Its Drivers Today” – Angry Bear.


“In Another Look at Drug Pricing and Costs” (Angry Bear) as detailed in “Trends in Prices of Popular Brand-Name Prescription Drugs in the United States” (JAMA Network Open), substantial cost increases amongst particular drugs was near universal, with a 76% median cost increase from January 2012 through December 2017. Almost all drugs (48 [98%]) displaying regular annual or biannual price increases. Of the 36 drugs available since 2012, 28 (78%) have seen an increase in insurer and out-of-pocket costs by more than 50%, and 16 (44%) have more than doubled in price.


Today we have government subsided Medicare Advantage plans overcharging, over coding, and denying coverage as seniors age as detailed by Kip Sullivan, “Why is CMS Overpaying Medicare Advantage Plans?” – Angry Bear. Medicare Advantage plans can not compete head to head with Traditional Medicare and Traditional Medicare is blocked by the government in offering some of the same programs as Medicare Advantage. Commercial Healthcare can not compete with traditional Medicare as its costs are too great.

As I am going to report later in the week, the government is sponsoring a take over of Veterans Healthcare which is also far more efficient than commercial healthcare. More on this later.

Been reporting on healthcare costs and prices a number of years.

It is going to be interesting how this next battle between healthcare insurers and the healthcare industry is going to fall out. Insurance companies have already dropped certain ACOs from their plans. The ACOs (hospital systems) want higher reimbursement for hospital care. In one instance, it was as high as 88%. I can not see the insured absorbing this either.

In the earlier portion of this post, I have laid out some of the abuse by the healthcare industry in support of finding a different way of managing healthcare. In case you have forgotten, healthcare constitutes 18% of GDP and is growing.

“Why insurers, health systems are breaking up,” (

“Insurers and health systems across the U.S. have been at odds during the most recent cycle of contract negotiations, and terminated contracts are affecting thousands of patients.

As hospitals continue to recover financially from the COVID-19 pandemic and deal with higher supply costs and employee wages, many organizations have tightening margins and hope to negotiate higher rates with insurers as a result. Hospitals are also pointing to rising inflation as a reason for needing higher rates.”


One recent example is Fort Lauderdale, Fla.-based Broward Health’s public breakup with United Healthcare. Thousands of the insurer’s beneficiaries went out of network with Broward April 1 after the two sides failed to agree on a new contract. Broward reportedly asked UnitedHealthcare for a pay increase to the same level UnitedHealthcare pays other South Florida health systems.

UnitedHealthcare said Broward’s rate increase request would amount to 88 percent higher reimbursement for its providers in the next four years, which the insurer said was “unreasonable.” Negotiations continue, but patients are out of network in the meantime.

Blue Cross & Blue Shield of Mississippi and the University of Mississippi Medical Center let their contract expire April 1 after they failed to agree on pay rate increases, according to the Clarion Ledger. The medical center treated more than 50,000 patients in the 18 months before the contract expiration.

LouAnn Woodward, MD, vice chancellor for health affairs and dean of the medical center’s school of medicine, said the health system wants “fair reimbursement” from Blue Cross & Blue Shield to reinvest in its facilities and programs. The insurer said the medical center wanted a 30 percent overall rate increase, including a 50 percent increase for some services, according to the newspaper report.

Physician groups and surgery centers aren’t immune from insurer conflicts. Blue Cross Blue Shield of Illinois terminated its contract with Springfield (Ill.) Clinic late last year, knocking 100,000 beneficiaries out of network.”

“Why insurers, health systems are breaking up,” (