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Impact of commercial over-reimbursement on hospitals: the curious case of central Indiana

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  • Michael F. Seibold

    (Seibold and Associates)

Abstract

An employer coalition in Indiana sponsored a study by the Rand Corporation examining commercial insurer payments as a percent of Medicare. The employers sought to understand why their health care costs were high and increasing. The study showed that, on average, their insurer was paying three times what Medicare pays for the same services. In this, a follow-up study, we demonstrate that these high payments resulted in very high profit margins for central Indiana’s major health systems, along with elevated costs and poor performance on key efficiency measures. We also see indications that hospitals appear to be using aggressive revenue cycle management techniques. The paper concludes with a discussion of policy issues.

Suggested Citation

  • Michael F. Seibold, 2019. "Impact of commercial over-reimbursement on hospitals: the curious case of central Indiana," International Journal of Health Economics and Management, Springer, vol. 19(1), pages 99-114, March.
    • Handle: RePEc:kap:ijhcfe:v:19:y:2019:i:1:d:10.1007_s10754-018-9249-9
    DOI: 10.1007/s10754-018-9249-9
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    More about this item

    Keywords

    Hospital reimbursement; Hospital costs and efficiency; Indiana;
    All these keywords.

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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