Historically Rocky Marriage Between Health Plans and Network Providers Is Becoming Even More Contentious
Atlantic Information Services, Inc. (AIS) - April 10, 2008 - Washington, DC

The historically rocky marriage between health plans and their network providers is crumbling, according to two recent surveys of hospital executives and physicians. And, as has happened in the past, failing relationships can ultimately have a negative effect on earnings for health plans, AIS's Health Plan Week reports.

The 113 hospital executives who responded to one of those surveys early this year gave three of the nation's five largest health plans more negative scores than positive ones. By far the most disliked and least trusted health plan operator was UnitedHealth Group, which received an unfavorable rating from 91% of respondents. The average unfavorable rating among the other plans was 41%.

Among the chief complaints against United were ones tied to claims denials, low reimbursement rates and an unwillingness to "fix claims." When asked which health plan was most difficult to negotiate with, 64% of hospital executives cited United, while 2% pointed to Aetna, Inc. United also was ranked as the slowest to process and pay claims. Overall, Aetna fared the best, with only 37% of respondents citing an unfavorable opinion of the company. Results of the survey were released this month by Santa Barbara, Calif.-based Davies Public Affairs. All participants were responsible for negotiating contracts with health plans and represent more than 10% of the nation's hospitals, according to Davies.

United was quick to dismiss the study as "narrow" and "non-scientific." The study failed to reflect the favorable relationships that United has with most of its 4,800 network hospitals, says United spokesperson Daryl Richard. "We work directly and collaboratively with hospitals to decrease administrative cost and complexity so that hospitals receive fair compensation for services, at the same time balancing overall health care costs in line with the Consumer Price Index on behalf of our customers," he says.

Health plan consultant John Gorman, CEO of Gorman Health Group, LLC., tells AIS’s Health Plan Week, he's not surprised that hospital executives rated United so poorly. "They wield the biggest club in the market and are not afraid to use it" during negotiations, he says. "But doctors and hospital execs don't like feeling bullied."

Henry Loubet, a senior vice president in the Oakland, Calif., office of Keenan & Associates, says the relationship between providers and insurers is critically important to the managed care industry. But, he adds, those relationships have worsened in the past few years "which is troubling." According to Loubet, health plans and providers need to be aligned in order to provide the best care for the members they both serve. Low ratings in areas such as honesty and candor could be in part a reflection of how tough United is when it comes to negotiating rates, he asserts. While health plans need to be more transparent by sharing information on how they make their decisions, hospitals and other providers also need to be more transparent about their rates as well, he says. Between 1996 and 1999, Loubet was the CEO of United's West Coast operations.

This article has been excerpted from AIS’s Health Plan Week. To read the full story, visit http://www.aishealth.com/PressReleases/PR2008_0410_hbd.html.

ABOUT AIS For more than 20 years, Atlantic Information Services, Inc. (AIS) has been serving the business of regulatory information needs of tens of thousands of health plan managers, hospital executives and other business leaders in health care. AIS publishes industry-leading business newsletters, books and reports, directories and databases, looseleafs and Web subscription services … and dozens of audioconferences and live conferences each year. Visit http://www.aishealth.com for more information.

CONTACT: Susan Cunningham Atlantic Information Services (800) 521-4323 scunningham@aispub.com

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