,,,Hospitals Profit from Aggressive Negotiations

Hospitals Profit from Aggressive Negotiations


Publication Date: January 2001

Publisher: Center for Studying Health System Change

Author(s): Glen P. Mays; Sally Trude; Lawrence P. Casalino; Patricia Lichiello

Research Area: Health

Type: Report

Coverage: Florida


In February 2001, a team of researchers visited Miami, Fla., to study that community's health system, how it is changing and the effects of those changes on consumers. The Center for Studying Health System Change (HSC), as part of the Community Tracking Study, interviewed more than 70 leaders in the health care market. Miami is one of 12 communities tracked by HSC every two years through site visits and surveys. Individual community reports are published for each round of site visits. The first two site visits to Miami, in 1996 and 1998, provided baseline and initial trend information against which changes are tracked. The Miami community encompasses Dade County.

The Miami health care market has become more tumultuous over the past two years, as key hospitals pressed health plans for more profitable contracts and, in some cases, threatened to drop out of plan networks if their demands were not met. Health maintenance organizations (HMOs), which dominate the market, experienced financial losses, leading plans to abandon aggressive price competition and increase premiums, hitting small businesses especially hard. Meanwhile, in a market where one in four persons is uninsured, demand for indigent care has grown. Though safety net providers have taken steps to respond, a state health care budget shortfall has created uncertainty about future funding.