Hospitals speak out on payers behaving badly

April 1, 2008

When the former owner of the NFL's Cleveland Browns announced he was moving the team to Baltimore in 1996, not only were Cleveland fans outraged, ironically, so were Pittsburgh Steelers fans-their biggest rivals. For the two seasons that the Browns franchise remained dark, the Steelers missed the Browns because they had enjoyed the competitive rivalry. The Browns team and its followers were the people they loved to hate.

An annual survey released last month by Davies Public Affairs and conducted by research group Fabrizio, McLaughlin and Associates found that healthcare provider organizations have unfavorable opinions of several of the largest payers, and it has less to do with competitive friction than you might think. I called up Brandon Edwards, Davies president and COO, and asked him if health plans are simply the organizations that providers love to hate.

According to Edwards, the unfavorable opinions are not, in fact, a matter of resentment of the role of payers in the healthcare system, but more so a perception of attitude and behavior. Providers used words such as "inflexible" and "unresponsive."

Hospitals clearly differentiate between good payers and bad payers when it comes to responsiveness, accuracy and honesty. Assuming hospitals just love to hate plans "can be a very handy excuse for companies to behave badly," he says. The payers that providers view positively are those they believe deal with them in an honest way and address concerns as they arise.

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You'd think hospitals would give their largest payers the worst ratings because of the amount of leverage they have, but the survey didn't show that correlation. Likewise, you'd also expect plans with the lowest pay rates to be viewed negatively by their provider counterparts, but that too is not the case.

Edwards believes the poorly rated payers that pay hospitals well theoretically could get away with paying less if they worked harder to create positive relationships with hospitals' managed-care leaders. Not to name names, but many state Blues plans that pay the lowest rates also received high marks in reputation in the survey. According to Edwards, if payers deal above board with hospitals, they don't need to get tough on rates and controlling costs.

"If providers could choose not to do business with certain payers-if they had that luxury-they wouldn't do business with them," he says.

Times are changing in healthcare, and it's entirely possible that providers might soon have the luxury of saying no thanks. Some of you would miss your provider partners if they ended their business relationship with you-love them or not.