AHA responds to article on insurer bargaining power

AHA this week shared with Senate Judiciary Committee Chairman Chuck Grassley, R-Iowa, and the Federal Trade Commission additional perspective on a recent Wall Street Journal article suggesting hospitals were at the root of contract terms that could disadvantage consumers. Grassley recently asked the FTC to assess certain contracting provisions between insurers and hospital systems for anticompetitive behavior, citing the article.
 
“Your recent inquiry to the Federal Trade Commission provides us the opportunity to share with you and the FTC some of our views on why that article misconstrued the dynamics between hospitals and commercial health insurers as it pertains to contract negotiations,” AHA wrote. “The overwhelming majority of hospitals and health systems are not the drivers in contract negotiations with commercial health insurers. In addition, the contract provisions hospitals and health systems are able to secure in negotiations typically have procompetitive and pro-consumer purposes, such as enabling the hospital or health system to successfully offer value-based care alternatives or protecting the hospital and its patients from unwarranted denials. Moreover, the article’s suggestion that the rise in the cost of health care is attributable to these contract negotiations is not borne out by the fact that hospital prices are currently at historically low growth rates and spending for hospital services overall is declining as a percentage of national health expenditures.”