Paduda: Payers, Maintain On to Your Purses and Wallets| Employees Compensation Information

By Joe Paduda

Monday, March 1, 2021 | 70 | 0 | min read

Two messages hit the virtual desk: hospitals will lose more than $ 50 billion this year, and consolidation between hospitals and health systems continues, not improving quality and increasing the leverage of health systems over payers.

Joe Paduda

The bad, terrible financial picture for hospitals comes after a pretty bad 2020, a year when operating margins were cut in half.

Of course, financial troubles are the main driver of consolidation as health systems with stronger balance sheets take over the struggling competitors. Doctors’ offices that experience declines in sales due to far fewer patient visits, fewer elective surgeries and more uninsured patients are also covered by health systems.

For the payers, especially in the area of ​​employee compensation, the balance of power has shifted to the providers. With control over many hospitals and thousands of doctors, systems like Sutter Health in California can dictate conditions for large groups of health buyers.

Indeed, I find it ironic that in addition to reporting on the consolidation problem in general, and Sutter Health in particular, the online ads include one for “The Walking Dead”. The ability of payers to control costs in consolidated healthcare markets is a challenge at best.

what does that mean to you?

If you operate in Alabama, Florida, Louisiana, Arkansas, Kansas, and a number of other states, your setup costs go up.

Joseph Paduda is a co-owner of CompPharma, a consulting firm focused on improving pharmacy programs in employee compensation. This column is republished from his Managed Care Matters blog with his permission.