Declining excess capacity has given hospitals more leverage in negotiations with health plans, and that could mean managed-care companies won't be able to administer Medicare benefits at a lower cost than the federal government, a key element of the Bush administration's Medicare reform plan. Citing concerns about costs and access to care, Sen. Max Baucus (D-Mont.) asked the nonpartisan Center for Studying Health System Change, Washington, to consider some of the issues in modeling Medicare after the federal employees' benefits plan, as proposed. In an April 10 letter to Baucus, center President Paul Ginsburg said many hospital executives indicated that a "lack of excess capacity had given them the leverage to decline managed-care contracts with unattractive payment rates." Congress is expected to take up Medicare reform in early summer. -- by Jeff Tieman
Less excess capacity may hurt Bush reform plan
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