Harvard Pilgram settles

Robert Weisman reports in today’s Boston Globe,

Harvard Pilgrim Health Care has struck a deal with state regulators to voluntarily limit its insurance rate increases for individuals and small businesses, a move the Patrick administration held up as evidence its bold campaign to hold down health costs is working.

The settlement was a surprise, coming just a week after an insurance appeals panel overturned a cap on Harvard Pilgrim’s rates imposed by the state Division of Insurance. The state agency deemed the increases proposed by Harvard Pilgrim and other insurers to be excessive. Other insurance carriers continue to appeal rate caps on their policy premiums.

Harvard Pilgram says it is losing millions of dollars in settling, which begs an obvious question: why settle? I’m not suspending an assumption of a profit maximization strategy. So this may be the best they think they can do given all the constraints of their business.

Later in the report we learn that

Insurers and state officials agreed on one thing: The focus is shifting to the costs of medical care by hospitals and other providers.

But a hospital industry official said she would be opposed to reopening existing contracts with insurers in the absence of legislation that would pave the way for redesigning health care delivery and payment systems.

Let’s get right to that health delivery and payment system redesign legislation then, shall we?

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