Plan reputations vary in eyes of providers

August 1, 2011

When it comes to big health plan payers, hospitals aren't feeling the love. That's the feedback from Revive Public Relations' fifth annual national payer survey.

Nearly 260 hospital executives responded to Revive's survey, which was sponsored by the Godbey Group, an Irving, Texas-based contract negotiation firm. Survey participants represented a full spectrum of facilities ranging from 25-bed rural hospitals to multi-state health systems, representing hundreds of hospitals.

Hospital executives say health plans are squeezing rates to boost profits, negotiating ferociously, and not doing enough to ensure quality. Contract disputes are causing significant disruption: More than 40% of hospitals surveyed reported having a dispute with a payer that resulted in the hospital becoming out-of-network during the previous five years.

"The report reveals certain problems in terms of health plans' relationships with hospitals," Revive founder Brandon Edwards says. "The question for the health plans is: are those problems they actually want to fix? The fundamental underlying finding in the report isn't an issue of economics, it's one of trust."

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To that point, Edwards notes that hospital respondents didn't necessarily use the survey to gripe about the dominant health plans in their individual markets.

"We sort of expect when we do these surveys that hospitals will have the worst perception of the biggest plan: the one with the most clout," he says. "But I don't think that's what this survey reveals. It's more a question of conflicting corporate cultures and distrust."

The survey includes a section in which respondents were asked to describe health plans in a word or two. The published report doesn't include those verbatim responses, but uses them to characterize the nature of hospitals' relationships with individual plans. Reimbursement rates are only one of the myriad problems in those relationships, Edwards says.

For example, UnitedHealthcare, which has consistently ranked low in terms of image and reputation over the five years Revive has conducted the survey, again ranked at the bottom. Nearly two thirds (64%) of respondents rated United "unfavorable" compared with 33% who rated it "favorable."

While the number of hospitals rating UnitedHealthcare among the best for payment rates increased by 6% last year, the plan struggles with issues of trust, Edwards says.

Hospitals say they don't know what to expect from the plan. In fairness, he notes, the insurer is improving its reputation: the 64% "unfavorable" rating is a marked improvement from 2008 when 91% of respondents rated it "unfavorable."

The 39 plans that collectively comprise the independent Blue Cross category saw their reputations reduced, with "unfavorable" ratings up 10%. Edwards attributed the decline to some of the Blues' aggressive negotiations and efforts to cut rates.

"They're so big there is a cultural and organizational arrogance," he says, noting that many hospitals perceive them as bullies.

Aetna, which enjoys the most favorable reputation of any major plan (66% "favorable"), suffered a similar reaction with negative ratings increasing by 8%. Nearly one in three (29%) respondents rated Aetna "unfavorable." Aetna pushed hard on reimbursement rates in provider contracts last year and announced intentions to take a harder line in negotiations, according to the report.

Although hospital respondents issued a litany of complaints, the report wasn't all insurer bashing. Respondents gave credit-if begrudgingly-where it was due.

"The good thing to come out of the report is that hospitals seem to be able to differentiate the cause of their unhappiness," Edwards says.

For example, the report quotes one respondent as saying, "One thing I appreciate about Blue Cross in my state: They may not pay fair rates, but they pay quickly and without hassle."

Indeed, Edwards says, respondents recognize individual plans for their strengths.

"If hospitals could build a Frankenstein they'd probably take Aetna's rates, United's market share, and the independent Blue Cross Blue Shields' administrative simplicity," he says. "I think if you could assemble those three things, you'd have a lot of really happy hospitals."