By now we've all heard about the money being wasted in our health insurance system. You'd think it would be in the insurance companies' interest to get rid of the needless spending. If they could do that, then they could charge lower premiums and attract more patients.
Lately at Planet Money, we've been asking why that hasn't happened. One answer is the insurance folks give us is that hospitals have been joining forces — agreeing on protocols for treatment and presenting a united front. Insurance companies say that when they try to get hospitals to eliminate unnecessary tests or perform more efficiently or charge less for certain services, the hospitals just say no and there isn't much the insurers can do.
The insurance companies have some backing for their complaint. A study from 2004 by the Center for Studying Health System Change concurs that hospitals now often have the upper hand in these battles. One particular fight was referred to as a "sumo-wrestling match." The group's report from 2001 found showdowns erupting, with hosptials and health care providers willing to play chicken during negotiations.
Throughout the years of debate over health care, hospitals have often taken the position that they know what is best for patients and don't want insurance companies dictating care. From their perspective, it's the insurance companies who are the bullies.
An excellent map from the Associated Press shows that often one insurance company does dominate a local market.
And if you missed Steve Inskeep's interview on Morning Edition with Wellpoint CEO Angela Braly, it's worth a listen. Wellpoint is the country's largest insurance company as measured by the number of people covered.