WPS Sues Aurora
This could send shockwaves through the health care marketplace in Wisconsin and beyond.
Aurora's market practices draw suitThe story goes on.
WPS' antitrust filing says care provider's rules drive up costs
One of the state's largest insurers says Aurora Health Care Inc.'s longstanding dominance of the Milwaukee hospital market is driving up health-insurance premiums throughout eastern Wisconsin.
Wisconsin Physicians Service Insurance Corp. has filed a broad antitrust lawsuit challenging Aurora's hardball negotiating tactics that require health insurers to include all of its hospitals and doctors in every health plan they sell.
The tactics have prevented large insurers in eastern Wisconsin from offering less costly health plans, particularly those designed for small employers and individuals, the lawsuit contends. WPS also blames Aurora for the Milwaukee market having the highest hospital costs of any metro area its size in the country.
The dispute provides a faint glimpse into the secret world of contract negotiations between Aurora and the companies that sell health insurance and administer health plans. It also provides details on the purported constraints imposed on those companies because of Aurora's strength in the Milwaukee market.This lawsuit, if it proceeds, could draw back the veil of secrecy that surrounds hospital pricing. Did you know that hospitals charge different insurers different prices for the same procedures? Most people don't and most people don't care, because they feel it's not their money being spent (after the co-pays and deductibles insurance 'handles' everything). And the uninsured really get nailed (with taxpayers picking up most of that tab).
Those constraints could hinder the emerging trend to design health plans that encourage people to use the most efficient hospitals and doctors - those providing the highest quality care at the lowest price.
I predict a settlement in this case, though. Aurora can't afford the scrutiny that will come with a trial. Hospitals hold their price arrangements with various insurance carriers, called a "charge master," extremely close to the vest. Discovery in this case would almost certainly lead to Aurora handing over their charge master.
Indeed health care is one of the only sectors of the economy where increased competition often doesn't lower costs, in part because the consumers are not empowered with price and quality data upon which to make informed choices.
This should be fun to watch.
1 Comments:
Your take on the contract dispute between Aurora Health Care and Wisconsin Physician’s Service Insurance Corp. is missing some key facts. Your posting is based on unsubstantiated accusations made by WPS in a countersuit – accusations that just aren’t true. WPS was sued after it continually tried to break its contract with Aurora – a contract that gives people the ability to access all Aurora facilities and services.
That full access is at the heart of Aurora’s integrated approach to health care. It helps ensure consistent care for a person at all stages of life. That approach is better for patients and holds down costs – contrary to what WPS is saying.
Another important point -- health care is no different from any other business when it comes to competition. Here is what Edward J. Novinski, Senior Vice President of UnitedHealthcare, one of the largest health insurance companies in the state and nation, said about competition during a public hearing last year:
“As we all know, health care is not solely about costs and prices, but more importantly, it is the health and well-being of your citizens. Competition not only rationalizes prices and costs, but also rewards innovation, supports innovations in quality, continuous improvement in customer and patient service levels and accessibility for a growing and diverse population.
“I would like to add that if I were to attend a similar hearing in a different market in the United States or this market with different circumstances, my comments would be exactly the same. Competition works in health care just like any other American innovation or business.
“A lack of competition stifles continuous performance improvement, quality improvement, price competition and service levels. Most severely, it impacts your citizens' ability to have service choices at a time when access in health care is most critical.”
The Aurora model allows health care to be delivered in a way that balances consumers’ demands for quality and affordability.
Quite simply – Aurora’s model of doctors, hospitals, therapies and all other health and wellness services working together leads to higher quality and helps to better manage the costs of care.
One final point – Aurora is among the leaders when it comes to scrutiny and openness on quality . Aurora is part of numerous national and statewide initiatives to measure and report on quality. As for prices, all health systems negotiate individual contracts with insurers. In the end, the two sides agree on a contract and live up to terms of the deal. Unfortunately, in the case of WPS – they have chosen to ignore their commitment.
Additional information on this matter is available at www.AuroraHealthCare.org
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