• Sound and questionable reasons for increasing private-sector health costs

    Merrill Goozner in the Fiscal Times (via Kaiser Health News) reports,

    [M]ore physicians and hospitals, encouraged by the health care reform law, are merging to promote efficiency and reduce costs over the long-term. The result in the short-run, however, will be an uptick in rates, the report suggested.

    “Health plans and providers are always working at the bargaining table over what’s fair year to year,” PwC’s Thompson said. “As providers have consolidated, they certainly have a stronger hand at that table.”

    Insurers that cover private-sector workers and their families will also face increased costs to cover shortfalls in hospital payments by Medicare and Medicaid. “The increase in Medicare in-patient hospital rates is expected to be 3.3 percentage points below the expected growth in their costs,” the PwC analysis said.

    I’ve bolded two sentences. One of them is unquestionably true. The other is questionably true (i.e., possibly not true, though it depends as much on interpretation as on science). If you can’t tell which is which see this and that.

    Meanwhile, I recommend the entirety of Goozner’s piece.

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