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How Could Hospitals Reduce Health Insurance Rates?

Image: tahitianlime under CC 3.0

Health insurance companies are often blamed for increasing premiums. In turn, they point the finger at hospitals. According to them, hospitals demand ever-increasing reimbursement rates, which must be passed onto policy holders.

A group of teaching hospitals in Massachusetts, Partners HealthCare, is trying to lessen their impact on costs. They are putting $40 million towards a proposal intended to reduce the cost of a small group health insurance plan for small businesses. Insurers will receive the money, and be required to use it to decrease premiums.

State Senate President Therese Murray also plans to propose a change to the current fee-for-service system that encourages uncoordinated care, where hospitals get paid on a per-procedure basis.

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