End-of-Year Hospital / Health Insurance Follies

As 2008 drew to a close, health-insurance providers and hospital systems once more drew swords over which could force the other to eat the lion’s share of rising medical costs. Most such clashes take place in comfortable obscurity, but a few manage to break into the news — often when negotiation turned into a game of chicken that could affect the healthcare of tens or hundreds of thousands of people.

So for readers, here are a few of the most notable end-of-year healthcare donnybrooks:

• A game of chicken gone bad: In Dayton, Ohio, Humana said it will cancel its contract with Premier Health Partners, a local hospital chain. Humana (HUM) complained that Premier hiked its medical rates at the beginning of 2008 and wanted to raise them again in 2009; Premier, by contrast, said Humana presented the chain with an “unacceptable” rate reduction. The cancellation will affect somewhere between 2,000 and 12,000 patients in the region, depending on how you count them.
• A happy ending… sort of: Florida hospital chain BayCare Health System and Aetna narrowly resolved their differences last week and struck a new three-year contract. The previous contract would have allowed BayCare to raise its rates by eight percent; Aetna (AET) balked and sought more favorable terms. BayCare claimed Aetna wanted to preserve a sweet lowball deal, but ended up compromising to give Aetna rates comparable to those of other major insurers instead of what apparently otherwise would have been higher rates.
• USF vs. Aetna, Kaiser: Although not strictly in the same category as the other two fights, the Jesuit-founded University of San Francisco is in an uproar over recent revelations that its student and employee health plans both cover abortion. USF says it is working with Aetna to eliminate the coverage in the mandatory student-health plan, but acknowledged that it had earlier been unable to do the same when negotiating employee coverage with Kaiser Permanente.