Employers and consumers are paying billions of dollars more a year for medical care to compensate for imbalances in the nation’s health care system resulting from tight Medicare and Medicaid budgets, according to Blue Cross officials and independent actuaries.
A new study commissioned by Premera Blue Cross, based in Seattle, has found a rapid acceleration in higher costs to private payers in Washington State, for example, as hospitals and doctors grapple with constraints in the federal health insurance programs.
The study found that in 2004, the most recent year for which full data are available, hospitals in Washington State charged an additional $738 million â€” or 14.3 percent of their revenue â€” to private payers to make up for Medicare and Medicaid underpayments. Similarly, doctors shifted $620 million, or 12 percent, said John Pickering, an actuary at Milliman Inc., a consulting and actuarial firm that conducted the study.
A similar Milliman study in California for 2004 said that health plans and consumers paid an additional $4.5 billion for hospital care in that state to compensate for Medicaid and Medicare constraints. Milliman’s California study, commissioned by Blue Shield of California, did not include physicians’ charges. [full text]