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Impact of commercial over-reimbursement on hospitals: the curious case of central Indiana

Michael F. Seibold ()
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Michael F. Seibold: Seibold and Associates

International Journal of Health Economics and Management, 2019, vol. 19, issue 1, No 6, 99-114

Abstract: Abstract An employer coalition in Indiana sponsored a study by the Rand Corporation examining commercial insurer payments as a percent of Medicare. The employers sought to understand why their health care costs were high and increasing. The study showed that, on average, their insurer was paying three times what Medicare pays for the same services. In this, a follow-up study, we demonstrate that these high payments resulted in very high profit margins for central Indiana’s major health systems, along with elevated costs and poor performance on key efficiency measures. We also see indications that hospitals appear to be using aggressive revenue cycle management techniques. The paper concludes with a discussion of policy issues.

Keywords: Hospital reimbursement; Hospital costs and efficiency; Indiana (search for similar items in EconPapers)
JEL-codes: I11 G22 (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s10754-018-9249-9

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International Journal of Health Economics and Management is currently edited by Leemore Dafny, Robert Town, Mark Pauly, David Dranove and Pedro Pita Barros

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