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Health plan-provider showdowns on the rise.

B C Strunk, K J Devers, R E Hurley

    Issue Brief (Center for Studying Health System Change)
    |October 18, 2001
    PubMed
    Summary
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    Health plan contract disputes are rising, shifting market power to providers. This may disrupt patient care, increase costs, and limit access to services.

    Area of Science:

    • Health economics
    • Healthcare market dynamics
    • Provider-payer relations

    Background:

    • Recent trends show increasing contract disputes between health plans and healthcare providers (hospitals and physicians) in local markets.
    • Providers are adopting aggressive negotiation tactics, including contract termination threats, to meet payment demands.

    Purpose of the Study:

    • To analyze the causes and consequences of escalating contract disputes between health plans and providers.
    • To examine the shift in market power dynamics favoring providers in local healthcare markets.
    • To understand the implications of these disputes for consumers, including healthcare costs and access.

    Main Methods:

    • Analysis of data from Center for Studying Health System Change (HSC) visits to 12 representative communities.

    Related Experiment Videos

  • Case study approach examining contract disputes in Boston, Orange County, and Seattle.

    • Main Results:

    • Contract disputes signal a power shift towards hospitals and physicians in local markets.
    • Disruptions in care are a significant risk, particularly when major providers are involved.
    • Consumer implications include potential increases in healthcare costs and reduced access to services.

    Conclusions:

    • Escalating contract disputes reflect changing market dynamics and a shift in power towards providers.
    • These disputes pose risks to patient care continuity, affordability, and access.
    • Policymakers and stakeholders need to address these market shifts to ensure stable healthcare delivery.