Health Plan-Provider Showdowns on the Rise

Publication Date: June 2001

Publisher: Center for Studying Health System Change

Author(s): Bradley C. Strunk; Kelly Devers; Robert E. Hurley

Research Area: Health

Type: Brief

Abstract:

During the past two years, increasing numbers of contract disputes between health plans and hospitals and physicians have erupted in local markets, according to recent Center for Studying Health System Change (HSC) visits to 12 nationally representative communities. Many providers are taking a hard line in negotiations, threatening to terminate health plan contracts if payment demands go unmet. These contract showdowns signal a shift in the balance of power in local markets toward hospitals and physicians and can potentially disrupt care for many patients, especially when the disputes involve communities’ largest and most prominent hospitals and physician groups. This Issue Brief presents case studies of showdowns in Boston, Orange County, Calif., and Seattle, highlighting the changing market dynamics triggering these disputes and the implications for consumers, including rising costs and diminished access to care.