Keep health care providers out of the health insurance business
The Wall Street Journal reports that some health care systems are getting into the health insurance business.
Gosh, how history repeats itself. Back in the 80s and 90s, several so-called "integrated" health systems got burned in the health insurance business. They didn't have insurance expertise, financial resources, market clout or credibility with individuals, employers or regulators. So most failed.
Hospitals and docs created Blue Cross and Blue Shield back in the 30s to make sure that they got paid the way they wanted to be paid, patients and payers be damned. That scam worked for decades until Medicare/Medicaid and smarter employers came along and forced the Blues to work for the payers instead of the providers.
If hospital systems try to compete with national health insurers, they'll lose the price wars even if they are the providers. This is because the national insurers have the financial and political resources and the market share that will allow them to crush the providers' plans whenever they decide to do that.
Over the last 35 to 40 years, too many hospital administrators have gotten their institutions into businesses that they knew little about, and they cost those institutions millions. Or, I should say, they ran up huge losses that they recovered by over-charging insurers and self-insured patients.
Most health care administrators are too smart to get into the insurance business. But their medical staffs get frustrated with insurers and demand that the hospital systems go into the health insurance, medical supply, group purchasing or whatever business the docs think will help them become richer.
Any board of directors that lets its CEO take it into what will be a money-losing, over-regulated business such as health insurance strikes me as being either incompetent, manipulated, self serving and/or all of the above.
State and federal legislators and regulators should not only outlaw health care providers from getting into the health insurance business, they also should enact anti-trust laws that break up the big regional and national health care chains and insurers.