MANAGED CARE May 2002. ©MediMedia USA
The Wall Street Journal reports on a "little-known power shift" that HMO executives have, in fact, known about (and acted on --see our cover story ) since the late 1990s. It seems that hospitals, through mergers and acquisitions, are in prime position to demand higher prices from insurers. Hospitals, claiming to have lost about $76 billion in federal funds thanks to reduced Medicare reimbursement rates since 1997, say they need the money.... Few are neutral about the budget-neutral language in the Bush administration's budget. Democrats are irked that the plan wants any increases in Medicare physician payments to be offset by decreases to other health care providers.... The once-common practice of reunderwriting is making a quiet comeback, according to the Wall Street Journal. One insurer, American Medical Security Group, improved its financial performance after it began to review the health of its individual policyholders annually.