Insurers need to look at themselves for savings

June 5, 2010

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IN ITS editorial “Playing hardball with hospitals,’’ the Globe misses the key point that insurers need to look at themselves for savings, and not just to providers. The insurers are attempting to meet the state’s premium cap by cutting indiscriminately from providers’ rates, irrespective of whether the rates are above or below market value. They would have the public believe that this is the only way to offer premium relief, but it is not. Among other things, insurers could examine their own administrative cost trends to find savings — by improving efficiency in the way they administer plans, providing a real accounting of their profits and reserves, and offering more transparency around their actual costs.

Insurers have long starved some providers while rewarding others with high rates. Why should anyone believe that insurers will not continue past practices and further disadvantage the poorest hospitals by holding the line at already unsustainably low levels? Cuts in insurance reimbursements for many of our state’s hospitals will further destabilize these institutions and are likely to lead to significant job loss at hospitals, some of which already are operating in the red.

Until insurers rectify the imbalanced payment system they helped to create and make major efficiency steps of their own, their voice will not be credible.

Ellen Zane
President and CEO Tufts Medical Center Boston

Dennis Keefe
CEO Cambridge Health Alliance Cambridge

The writers are chairwoman and chairman-elect, respectively, of the Massachusetts Hospital Association.

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