Health Care

AHIP Throws Hospitals and Doctors Under the Bus

by Tim Foley

categories: Enemies Of Reform, For Profit Insurance

Published May 20, 2009 @ 03:09PM PT

Few groups perform “disunity” better than the Democratic Party. If there’s a way to screw up health care out of self-interest, we’ll find a way to do it, which is one of many reasons why we’ve gotten our butts handed to us time and again by the forces of the status quo. Yet today, we saw an odd sight – AHIP reacting to a fusillade against its practices by blaming hospitals and doctors. Either the political moment really is different this time, or we’ve found our way to Bizarro World.

Today, Health Care for America NOW, joined by Senator Chuck Schumer (who clearly has oiled his glove, polished his cleats and prepared himself mentally to play health care hardball), issued a report on how completely non-competitive the private insurance industry is in nearly every market in the U.S., how that monopoly ties directly to the higher costs of both insurance premiums and health care in general. The report is tied to a letter urging the Department of Justice to investigate anti-trust violations by insurers. As you can guess, it’s chock full of chilling statistics:

• “More than 94 percent of all insurance markets in the United States are highly concentrated.
• “The number of insurers has fallen by 20 percent.
• “Premiums increased by more than 87 percent from 2000 to 2007.
• “Private insurance spending is increasing at a rate 37 percent greater than spending for Medicare.”

Certainly reflects poorly on the current state of the private insurance market and strengthens the need for a public health insurance plan to compete with private insurance.

As you would expect, AHIP issued a response within a few hours. As you wouldn’t expect, they immediately turn around and say, “It’s all the providers’ fault!” Quoting from their press release, “Studies over many years have shown clearly that rising health care costs are the result of increases in hospital costs, increases in physician expenses, and increases in the cost of pharmaceuticals. To the extent that research has raised the question of competition as a factor in rising health care costs, it has pointed to consolidation among providers, not health plans.” That’s now what you’re supposed to do! You’re supposed to blame any number of factors: state regulations, Medicare, taxes, employers making the choices instead of individuals, the stock market, Saturn being in the seventh house, etc. So focused is the AHIP release on shifting blame rather than hitting back at HCAN who, you know, commissioned and released the report in the first place that they forget to even mention the public plan until the fifth paragraph. When they object to the antitrust charge, they attempt to claim the high road by saying anti-trust laws weren’t designed “to advantage providers or advance a political agenda.” Note the order! So HCAN hits AHIP, and AHIP turns around and hits the American Hospital Association?

What the heck is going on here?

That’s not at all what we were expecting this year. We were expecting a relatively united front of amiable opposition from AHIP, Big Pharma, the AHA and the American Medical Association, if for no other reason than they’ve been allied against health care before. But what we may have overestimated is that there’s a natural tension between many of these players, especially between the payers of care (insurers) and the providers of care (hospitals, doctors, etc.). Without a common enemy to unite them, they’re likely to squabble with each other. Could it be that they sense that, unlike previous attempts, they can’t fully stop this movement for reform, that they can only influence it so their part of the pie is preserved? Is that why AHIP’s kneejerk reaction today was to save their own skin by throwing hospitals and providers under the bus?

Time will tell. I wouldn’t yet count out Democrats in Congress and progressive interest groups to turn against each other, “circular firing squad”-style as well if the going gets tough or it looks like the only way to pass reform is to water it down. But maybe, just maybe, the forces of the status quo won’t be able to hang together that long.

(Photo credit:  Hryck on Flickr.)