Hospital leaders increasingly open to negotiated price caps
Skip to main content
MDHC_Logotype_white
Subscribe
  • My Account
  • Login
  • Subscribe
  • News
    • This Week's News
    • COVID-19
    • Providers
    • Insurance
    • Government
    • Finance
    • Technology
    • Safety & Quality
    • People
    • Regional News
    • Digital Edition
    • Lilly: Drug can prevent COVID-19 illness in nursing homes
      Mobile labs take vaccine studies to diverse neighborhoods
      Biden to sign virus measures, requires mask use to travel
      vaccine shot injection_i_i.jpg
      11,900 COVID-19 vaccine doses ruined en route to Michigan
    • Lilly: Drug can prevent COVID-19 illness in nursing homes
      Mobile labs take vaccine studies to diverse neighborhoods
      Biden to sign virus measures, requires mask use to travel
      vaccine shot injection_i_i.jpg
      11,900 COVID-19 vaccine doses ruined en route to Michigan
    • Louisiana gets reports vaccine providers are discriminating
      'We know this is real': New clinics aid virus 'long-haulers'
      The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      Trenda Ray
      Q&A: Arkansas nursing leader looking for creative staffing solutions as COVID cases surge
    • UnitedHealthcare operating earnings fall by $2 billion in Q4
      CMS approves rule forcing insurers to ease prior authorization
      COVID-19 still a big uncertainty for insurers in 2021
      Health insurers' outlook boosted after Dems' Georgia win
    • Biden signs executive orders to reverse, pause Trump-era rules
      CMS finalizes blood-based colon cancer screening coverage
      As virus surges, states reporting shortages of vaccine
      New CDC director takes over beleaguered agency amid crisis
    • Providers await new HHS coronavirus grant reporting deadline
      Operation Warp Speed Dr. Moncef Slaoui, Pfizer Group President Angela Hwang, Moderna CEO Stephane Bancel, CVS Health Executive Vice President Karen Lynch and McKesson CEO Brian Tyler participate in a panel discussion on the COVID-19 vaccine.
      Hospitals, drug companies strive to stand out virtually at JPM
      Intermountain, Trinity, Memorial Hermann behind $300M private equity fund
      Operation Warp Speed to bump up McKesson's stock price
    • A man in a room with servers.
      Momentum grows to outsource hospital tech functions in 2021
      5 things to know about Google's $2.1B Fitbit acquisition
      Providence bets on machine-learning, consolidating data centers
      Mental health treatment was most common telehealth service during COVID
    • Mobile labs take vaccine studies to diverse neighborhoods
      As virus surges, states reporting shortages of vaccine
      Sticking to Mediterranean diet is good for the brain
      Chance of COVID-19 triage care looms over Arizona hospitals
    • Elizabeth Richter will serve as acting CMS administrator
      Providence names new chief financial officer
      Wisconsin's top health official departing for federal job
      Cone Health CEO, CFO to depart amid pending Sentara merger
    • Midwest
    • Northeast
    • South
    • West
  • Insights
    • ACA 10 Years After
    • Best Practices
    • InDepth Special Reports
    • Innovations
    • The Affordable Care Act after 10 years
    • New care model helps primary-care practices treat obesity
      doctor with patient
      COVID-19 treatment protocol developed in the field helps patients recover
      Rachel Wyatt
      Project to curb pressure injuries in hospitals shows promise
      Yale New Haven's COVID-19 nurse-staffing model has long-term benefits
    • Dr. James Hildreth
      How medical education can help fight racism
      Modern Healthcare InDepth: Breaking the bias that impedes better healthcare
      Videos: Healthcare industry executives describe their encounters with racism
      Michellene Davis
      Healthcare leadership lacks the racial diversity needed to reduce health disparities
      Hospital divided into multiple pieces
      Health systems may be warming to offshoring, a mainstay practice for insurers
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      self service station
      COVID-19 pushes patient expectations toward self-service
      Targeting high-risk cancer patients with genetics
      A nurse holds up a phone with a message to a family member saying surgery has started.
      Texting, tablets help hospitals keep family updated on patient care
  • Transformation
    • Patients
    • Operations
    • Care Delivery
    • Payment
    • Highmark Health inks six-year cloud, tech deal with Google
      Study: 1 in 5 patients report discrimination when getting healthcare
      HHS proposes changing HIPAA privacy rules
      Android health records app launches at 230 health systems
    • California hospitals prepare ethical protocol to prioritize lifesaving care
      Amazon, JPMorgan Chase, Berkshire Hathaway disband Haven
      Digital pathways poised to reshape healthcare continuum in 2021
      Healthcare was the hardest hit by supply shortages across all U.S. industries
    • A woman with a wearable sensor talking to her provider.
      Wearable sensors help diagnose heart rhythm problems in West Virginia
      New care model helps primary-care practices treat obesity
      How hospitals are building on COVID-19 telehealth momentum
      Researchers: Hospital price variation exacerbates health inequities
    • MedPAC votes to boost hospital payments, freeze or cut other providers
      Most Next Gen ACOs achieved bonuses in 2019
      Congress recalibrates Medicare Physician Fee Schedule after lobbying
      CMS approves rule to encourage value-based drug pricing
  • Data/Lists
    • Rankings/Lists
    • Interactive Databases
    • Data Points
    • Health Systems Financials
      Executive Compensation
      Physician Compensation
  • Op-Ed
    • Bold Moves
    • Breaking Bias
    • Commentaries
    • Letters
    • Vital Signs Blog
    • From the Editor
    • Wellstar CEO calls adapting for the pandemic her bold move
      Howard P. Kern
      Recognizing the value of telehealth in its infancy
      Dr. Stephen Markovich
      A bold move helped take him from family doctor to OhioHealth CEO
      Dr. Bruce Siegel
      Why taking a hospital not-for-profit was Dr. Bruce Siegel’s boldest move
    • Barry Ostrowsky
      Ending racism is a journey taken together; the starting point must be now
      Laura Lee Hall and Gary Puckrein
      Increased flu vaccination has never been more important for communities of color
      John Daniels Jr.
      Health equity: Making the journey from buzzword to reality
      Mark C. Clement and David Cook
      We all need to 'do something' to fight inequities and get healthcare right, for every patient, every time
    • Dr. Bruce Siegel
      By protecting the healthcare safety net, Biden can put us on the path to a stronger country
      Healing healthcare: some ideas for triage by the new Congress, administration
      Dr. Sachin H. Jain
      Medicare for All? The better route to universal coverage would be Medicare Advantage for All
      Connectivity: a social determinant of health that can exacerbate all the others
    • Letters: Eliminating bias in healthcare needs to be ‘deliberate and organic’
      Letters: Maybe dropping out of ACOs is a good thing for patients
      Letters: White House and Congress share blame for lack of national COVID strategy
      Letters: VA making strides to improve state veterans home inspections
    • Sponsored Content Provided By Optum
      How blockchain could ease frustration with the payment process
      Sponsored Content Provided By Optum
      Three steps to better data-sharing for payer and provider CIOs
      Sponsored Content Provided By Optum
      Reduce total cost of care: 6 reasons why providers and payers should tackle the challenge together
      Sponsored Content Provided By Optum
      Why CIOs went from back-office operators to mission-critical innovators
  • Awards
    • Award Programs
    • Nominate
    • Previous Award Programs
    • Other Award Programs
    • Best Places to Work in Healthcare Logo for Navigation
      Nominations Open - Best Places to Work in Healthcare
      Nominations Open - Health Care Hall of Fame
      Nominations Open - 50 Most Influential Clinical Executives
    • 100 Most Influential People
    • 50 Most Influential Clinical Executives
    • Best Places to Work in Healthcare
    • Health Care Hall of Fame
    • Healthcare Marketing Impact Awards
    • Top 25 Emerging Leaders
    • Top 25 Innovators
    • Top 25 Minority Leaders
    • Top 25 Women Leaders
    • Excellence in Nursing Awards
    • Design Awards
    • Top 25 COOs in Healthcare
    • 100 Top Hospitals
    • ACHE Awards
  • Events
    • Conferences
    • Galas
    • Webinars
    • COVID-19 Event Tracker
    • Leadership Symposium
    • Healthcare Transformation Summit
    • Women Leaders in Healthcare Conference
    • Workplace of the Future Conference
    • Strategic Marketing Conference
    • Social Determinants of Health Symposium
    • Best Places to Work Awards Gala
    • Health Care Hall of Fame Gala
    • Top 25 Minority Leaders Gala (2022)
    • Top 25 Women Leaders Gala
  • Listen
    • Podcast - Next Up
    • Podcast - Beyond the Byline
    • Sponsored Podcast - Healthcare Insider
    • Video Series - The Check Up
    • Sponsored Video Series - One on One
    • Carter Dredge
      Next Up Podcast: Ready, set, innovate! Innovation and disruption in healthcare
      Next Up Podcast: COVID-19, social determinants highlight health inequities — what next?
      Ceci Connolly
      Next Up Podcast: How to navigate the murky post-election waters
      Next Up Podcast: Saving Rural Health
    • An older man wearing a mask receiving a vaccine.
      Beyond the Byline: Verifying information on the chaotic COVID-19 vaccine rollout
      doctor burnout
      Beyond the Byline: How healthcare supply chain struggles contribute to employee burnout
      Beyond the Byline: Covering race and diversity in the healthcare industry
      Beyond the Byline: How telehealth utilization has impacted investor-owned company earnings
    • Leading intention promote diversity and inclusion
      Introducing Healthcare Insider Podcast
    • The Check Up: Chip Kahn
      The Check Up: Chip Kahn of the Federation of American Hospitals
      The Check Up: Trenda Ray
      The Check Up: Trenda Ray of the University of Arkansas for Medical Sciences
      The Check Up: Dr. Kenneth Davis
      The Check Up: Dr. Kenneth Davis of Mount Sinai Health System
      The Check Up: Dr. Thomas McGinn
      The Check Up: Dr. Thomas McGinn of CommonSpirit Health
    • Video: Ivana Naeymi Rad of Intelligent Medical Objects
  • MORE +
    • Advertise
    • Media Kit
    • Newsletters
    • Jobs
    • People on the Move
    • Reprints & Licensing
MENU
Breadcrumb
  1. Home
  2. Politics & Policy
December 07, 2019 01:00 AM

Hospital leaders increasingly open to negotiated price caps

Harris Meyer
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Modern Healthcare CEO Power Panel

    With Democrats debating Medicare for All and public-option health plans, healthcare CEOs have become surprisingly open to the idea of negotiated caps on provider payment rates, according to Modern Healthcare’s latest Power Panel survey.

    While expressing strong misgivings about those Democratic reform proposals, 75% of CEOs responding to the survey last month said their organization could live with some form of price caps as long as their industry had the opportunity to negotiate reasonable levels.

    “There has been a change in thinking about payment caps over the last five years,” said Howard Kern, CEO of Sentara Healthcare. “The industry can’t be out there setting outrageous prices. We have to be prepared to set rates that are reasonable. But all the players, including pharma, have to be playing under the same rules.”

    Price caps are only one of a number of major policy challenges and opportunities the CEOs anticipate facing depending on the outcome of the 2020 presidential and congressional elections.

    The survey was based on a small sample size, with 12 healthcare CEOs responding. Those surveyed overwhelmingly see federal health policy currently moving in the wrong direction.

    In contrast, after the election they want to see action on expanding and strengthening the Affordable Care Act, controlling prescription drug prices, and boosting funding for mental health and addiction treatment. About 42% of those responding said the election will have a major impact on their industry. “This may be one of the most significant elections for healthcare in a very long time,” said Chris Van Gorder, CEO of Scripps Health, citing the possibility of victorious Democrats establishing a single-payer government health insurance system, which he opposes.

    Half of respondents said the election outcome will have only a modest impact, though some said that with the expectation that voters are unlikely to give either party commanding control of Congress and the ability to pass ambitious legislation.

    “Drug prices have got to be addressed, but there will have to be some alignment between the Senate and the House to get that done,” Kern said.

    Van Gorder agreed that curbing drug prices is critical, particularly as value-based payment grows. “Some drugs are so expensive that they could destroy the value-based plan with just a few patients needing that therapy,” he said. “We need some frames around those costs.”

    The healthcare executives are deeply worried about what will happen if the courts strike down the ACA as unconstitutional, in response to a lawsuit filed by Republican attorneys general and backed by the Trump administration. A ruling in that case is expected soon from the conservative-dominated 5th U.S. Circuit Court of Appeals, after which an appeal to the U.S. Supreme Court is likely no matter the decision.

    Difficult to fathom

    Still, the CEOs have a hard time imagining either the courts or federal elected officials erasing the most popular provisions of the law, such as expanding Medicaid to low-income adults. Most predicted that if the courts topple the ACA, Congress will reenact it with slight changes to pass constitutional muster.

    “If the ACA is struck down without a plan to replace it, we’re in deep trouble in this country,” said Dr. Gary Kaplan, CEO of Virginia Mason Health System. “All those provisions for coverage, pre-existing condition protections, and keeping children on their parents’ health plan have become norms. We have to be prepared to reenact legislation.”

    CEOs interviewed for this article had different views of Democratic proposals to establish cheaper public-option health plans to compete with private insurers, which some experts consider a more politically viable approach than Medicare for All.

    Peter Fine, CEO of Banner Health, warned that public-option plans likely would underpay providers and disrupt the healthcare system. “We have to make big investments on a long-term horizon,” he said. “When we see a significant level of disruption, does that make us nervous? You bet it does.”

    In contrast, Kaplan sees some form of a public-option plan that pays reasonable rates and moves the U.S. toward universal coverage as desirable. In Washington state, where his system operates, public-option plans administered by private insurers and paying hospitals about 160% of Medicare rates are slated to hit the market in 2021, under a state law passed this year.

    Still, he cautions that the public-option plans have to pay more than Medicare, and that rates need to be set through a collaborative effort between government, health plans and providers.

    “There are huge disparities in commercial rates and there could be some advantages if those payments are leveled out, particularly for those who don’t have pricing power in the market,” he said.

    Billing legislation expected to hurt

    Half of CEOs surveyed said current bipartisan congressional efforts to protect patients from surprise, out-of-network bills would have a negative impact on their organizations.

    While they support the idea of shielding patients from such bills, they oppose the idea of capping out-of-network rates. They’d prefer an arbitration process between providers and payers.

    “If you set the price cap for out-of-network care in the emergency room at 150% of Medicare, we would lose millions,” said Van Gorder, whose state already caps out-of-network rates but not for self-insured plans. “And it would take away the incentive of insurers to negotiate a fair rate. That’s why insurers are advocating for this.”

    Shifting Medicaid financing to a capped federal payment model, which the Trump administration and congressional Republicans strongly support, is another proposal that 75% of CEOs said would have a negative effect on their organizations. That’s a direction Republicans are likely to go if they win the elections.

    But one CEO said much depends on the complex details of how a Medicaid block grant or per-capita cap model is designed.

    “We could be very receptive to a block-grant approach giving us more flexibility to manage Medicaid patients,” said Kern, whose organization offers health plans serving people dually eligible for Medicaid and Medicare. “But I am worried the feds will look for the states to pick up a bigger share of the costs of seniors on Medicaid.”

    ACA backup plan TBD

    Meanwhile, the CEOs said they are not making any contingency plans for the ACA being thrown out or for the next Congress to pass a major healthcare overhaul like Medicare for All. Instead, they are focusing on delivering high-quality care and innovating to increase the value of the care they provide.

    “We won’t react to every fear or piece of legislation,” Van Gorder said. “If we did that, we would drive the organization absolutely nuts. I get up every day worrying about whether we’re going to deliver good care to the patient in the trauma room. I worry less about what legislators are doing in Washington or Sacramento.”

    The CEOs interviewed all lamented the partisan-driven reversals in health policy over the past decade. They guardedly hope that Republicans and Democrats after the 2020 elections will move forward together on the nation’s health goals.

    “Had Republicans and Democrats worked together to fix the ACA, we wouldn’t be talking now about radical approaches that I don’t think will work,” Van Gorder said. “After the election I’m highly skeptical that will happen. But I’d like to think it will.”

    Letter
    to the
    Editor

    Send us a letter

    Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

    Recommended for You
    Biden to sign virus measures, requires mask use to travel
    Biden to sign virus measures, requires mask use to travel
    The Check Up: Chip Kahn of the Federation of American Hospitals
    The Check Up: Chip Kahn of the Federation of American Hospitals
    Sponsored Content
    Get Free Newsletters

    Sign up for free enewsletters and alerts to receive breaking news and in-depth coverage of healthcare events and trends, as they happen, right to your inbox.

    Subscribe Today

    The weekly magazine, websites, research and databases provide a powerful and all-encompassing industry presence. We help you make informed business decisions and lead your organizations to success.

    Subscribe
    Connect with Us
    • LinkedIn
    • Twitter
    • Facebook
    • RSS
    • Instagram

    Stay Connected

    Join the conversation with Modern Healthcare through our social media pages

    MDHC_Logotype_white
    Contact Us

    (877) 812-1581

    Email us

     

    Resources
    • Contact Us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Editorial Dept
    • Submission Guidelines
    • Code of Ethics
    • Awards
    • About Us
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Modern Healthcare
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • This Week's News
      • COVID-19
      • Providers
      • Insurance
      • Government
      • Finance
      • Technology
      • Safety & Quality
      • People
      • Regional News
        • Midwest
        • Northeast
        • South
        • West
      • Digital Edition
    • Insights
      • ACA 10 Years After
      • Best Practices
      • InDepth Special Reports
      • Innovations
    • Transformation
      • Patients
      • Operations
      • Care Delivery
      • Payment
    • Data/Lists
      • Rankings/Lists
      • Interactive Databases
      • Data Points
    • Op-Ed
      • Bold Moves
      • Breaking Bias
      • Commentaries
      • Letters
      • Vital Signs Blog
      • From the Editor
    • Awards
      • Award Programs
        • 100 Most Influential People
        • 50 Most Influential Clinical Executives
        • Best Places to Work in Healthcare
        • Health Care Hall of Fame
        • Healthcare Marketing Impact Awards
        • Top 25 Emerging Leaders
        • Top 25 Innovators
        • Top 25 Minority Leaders
        • Top 25 Women Leaders
      • Nominate
      • Previous Award Programs
        • Excellence in Nursing Awards
        • Design Awards
        • Top 25 COOs in Healthcare
      • Other Award Programs
        • 100 Top Hospitals
        • ACHE Awards
    • Events
      • Conferences
        • Leadership Symposium
        • Healthcare Transformation Summit
        • Women Leaders in Healthcare Conference
        • Workplace of the Future Conference
        • Strategic Marketing Conference
        • Social Determinants of Health Symposium
      • Galas
        • Best Places to Work Awards Gala
        • Health Care Hall of Fame Gala
        • Top 25 Minority Leaders Gala (2022)
        • Top 25 Women Leaders Gala
      • Webinars
      • COVID-19 Event Tracker
    • Listen
      • Podcast - Next Up
      • Podcast - Beyond the Byline
      • Sponsored Podcast - Healthcare Insider
      • Video Series - The Check Up
      • Sponsored Video Series - One on One
    • MORE +
      • Advertise
      • Media Kit
      • Newsletters
      • Jobs
      • People on the Move
      • Reprints & Licensing