Health Beat: Report Says U.S. Hospitals Well-positioned For Insurer Consolidation
by July 8, 2015 6:31 am 93 views
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FITCH: U.S. HOSPITALS WELL-POSITIONED FOR INSURER CONSOLIDATION
The for-profit hospital industry is well-positioned with respect to the anticipated wave of mergers and acquisitions (M&A) amongst the largest for-profit health insurers, but consolidation could have some important longer term ramifications, Fitch Ratings said Tuesday.
The planned tie-up of Aetna and Humana could create the second largest national for-profit health insurer by revenue if approved by anti-trust regulators. The announcement of the merger comes on the back of some favorable developments for the hospital industry. Most importantly, the U.S. Supreme Court recently ruled that more than 6 million enrollees in the public health insurance exchange plans created by the Affordable Care Act (ACA) can keep the financial subsidies that make these plans more affordable.
In part because of the ACA-related expansion of health insurance coverage, hospitals have recently experienced a marked improvement in organic operating trends, particularly in growth of volumes of patients.
“M&A amongst health insurers is not likely to immediately result in outright price pressure for hospitals. In many markets, health insurers are already fairly consolidated and recent actions by hospitals to build market presence will shore up negotiating power,” Fitch said.
Hospital companies will begin reporting 2Q15 results later this month. The full report, “Hospitals’ Credit Diagnosis: ACA Ruling Positive but Facing Insurer Consolidation Wave” is available at www.fitchratings.com.
THREE QUESTIONS (FOUR, ACTUALLY) WITH SEN. JIM HENDREN
State Sen. Jim Hendren, R-Sulpher Springs, weighs in with thoughts on the Health Reform Task Force, King v. Burwell, the Private Option, and state and school employee health insurance. Read his candid comments in this interview with TB&P contributor Steve Brawner.
INSURERS SEEKING BIG RATE INCREASES FOR NEXT YEAR, ARKANSAS NOT LIKELY
Health insurers across the country are asking state regulators for large rate increases for next year, citing losses caused by higher-than-expected patient utilization and a sicker than expected risk pool, the New York Times reported July 4. However, in Arkansas that may not be the case.
According to the Times, Blue Cross and Blue Shield plans have asked for increases of 54% in Minnesota, 36% in Tennessee and 31% in Oklahoma, the newspaper reported. Blue Cross and Blue Shield of Minnesota said it lost more than $135 million in the individual insurance market in 2014. BlueCross BlueShield of Tennessee lost $141 million.
In Arkansas, the state Insurance Department has not released figures of rate requests, suggesting that any anticipated increase requests will be less than 10%. Read more here.
JACKSONVILLE HOSPITAL PARTNERS WITH UAMS TO PROVIDE EMERGENCY CARE FOR STROKE PATIENTS
North Metro Medical Center in Jacksonville has partnered with the University of Arkansas for Medical Sciences (UAMS) to provide emergency care for stroke patients in the region.
Called AR SAVES (Arkansas Stroke Assistance through Virtual Emergency Support), the program uses a high-speed video communications system to help provide immediate, life-saving treatments to stroke patients 24 hours a day. The real-time video communication enables a stroke neurologist to evaluate whether emergency room physicians should use a powerful blood-clot dissolving agent within the critical three-hour period following the first signs of stroke.
The AR SAVES program is a partnership between the UAMS Center for Distance Health, the state Department of Human Services, North Metro Medical Center and 47 other Arkansas hospitals. Since the program began Nov. 1, 2008, more than 2,791 patients have received stroke consults through AR SAVES and 751 patients have received the blood-clot dissolving agent. UAMS says the AR SAVES program will continue adding hospitals across Arkansas in the coming months.