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Hospitals Worried About Health Insurance Decision

Friday, July 09, 2010


The day after the state health insurance commissioner approved rate hikes, one of the largest hospital systems in Rhode Island said the decision gave it plenty to be worried about.

Care New England, a hospital conglomerate which includes Butler, Kent, and Women and Infants hospitals, said it would not be directly affected by the rate increases because it self-insures its employees. But it said the 8.4 to 12.3 hikes that were approved could have a broad impact on other Rhode Island businesses.

“The magnitude of these increases may cause more RI employers to reduce or drop health coverage,” said May Kernan, a CNE spokesperson. “In addition to the already high unemployment in the state, this would likely cause increased charitable care and bad debts.”

She added that hospitals are already facing financial challenges because of uncompensated care, despite “strenuous efforts” to cut costs and become more efficient.

Hospitals Resist Cap on Prices

In his decision on health insurance rates, Commissioner Chris Koller also imposed six conditions for contracts between health insurance companies and hospitals. Kernan said Care New England supported two of those conditions, which require quality incentives and standards for administrative efficiency.

“But we do have some concerns about price caps for increases to hospitals when no such caps are in place for the goods and services the hospitals use to provide the necessary care,” Kernan said. “We would be concerned if the inflation cap did not allow us to address increases in uncompensated care, to meet our obligations to employees for competitive salary and wages or to keep pace with other expenses, and, at the same time allow us to manage a modest gain from hospital operations.”

Lifespan—which includes Hasbro Children’s and Rhode Island hospitals—declined to comment. “We are still reviewing the details, beyond that, we have no comment,” said Mark Montella, senior vice president of external affairs.


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