What happens when your hospital is also your insurance company? We’re starting to see the effects

Nearly one in three hospitals now also own Medicare Advantage insurance plans, covering close to a sixth of the program's 35 million-plus enrollees, according to a database compiled by health services researchers. These 'payviders' both decide what care to provide and how much to pay for it.

Some research finds these arrangements produce fewer prior authorizations, better care coordination, and fewer readmissions. But the researchers also found hospital-affiliated Medicare Advantage plans charge about 5% more, on average, than unaffiliated plans at the same hospital, and tend to record more diagnoses per patient — a pattern consistent with, but not proof of, gaming government risk-adjustment payments.

The researchers note hospital-owned plans also report higher medical loss ratios, which could mean genuinely sicker patients, or could mean inflated internal pricing used to satisfy the legal requirement that 85% of premiums go to care while still boosting profits.

The full dispatch is available from the source below.