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Health insurance provider explains negotiations with Memorial Health System

At Anthem Blue Cross and Blue Shield, we’re committed to making healthcare more simple, accessible and affordable for Ohio consumers. This is certainly a challenge as healthcare prices and costs have risen so dramatically in recent years. Nonetheless, the people, businesses and communities we serve trust us to deliver access to affordable healthcare, and that is a responsibility we take very seriously.

As reported in The Marietta Times, we have been negotiating with Memorial Health System for months to maintain this local health system in Anthem Blue Cross and Blue Shield’s provider network. We’ve been working in good faith with Memorial Health to reach an agreement that provides fair payment for the services it provides, but also maintains affordable access to care for Marietta consumers. It’s important to know that Anthem’s payment to Memorial Health has increased by 22 percent over the last five years, placing Memorial Health among the highest paid of any similarly-sized health system in Ohio. Despite this, Memorial Health has demanded double digit payment increases for 2020, and additional increases in 2021 and every year thereafter.

Price increases of the magnitude that Memorial Health is demanding are simply unsustainable. It should always be remembered that it’s Marietta’s residents and employers who would bear the burden of the price increases that Memorial Health is asking the community to support. That’s because many employers are self-funded, which means Anthem BCBS handles the claims, but the employer actually pays directly for the healthcare services that employees and their family members receive. Employers that aren’t self-funded would also see their insurance premiums increase. And, most alarmingly, individual consumers would bear the burden of these increases in the form of higher copayments, deductibles and premiums.

Employers and consumers in Marietta have repeatedly expressed concern about skyrocketing healthcare prices. Faced with healthcare prices that are rising at three to four times the cost of living, many employers are struggling to continue offering medical benefits to their employees. And, according to a recent Harvard University study, the leading cause of personal bankruptcy in this country is healthcare expenses – evidence that the high cost of healthcare is impacting real people, including right here in southeast Ohio. In short, it’s your money and something must change.

Among the many ways Anthem is addressing healthcare affordability is by partnering with Ohio health systems to bring price predictability to categories of healthcare that have been wildly unpredictable in the past. Historically, charges for healthcare services have been paid as a “percent of charge,” meaning that employers and consumers paid a negotiated discount off the price the hospital charged. The problem was that hospitals could simply increase their price at any time, driving up costs for employers and consumers with little or no notice. Anthem has successfully partnered with health systems across Ohio to move to “fixed rate” pricing, meaning that both parties agree to a set price for each service for the duration of the contract. Fixed rate pricing is the current best practice and future of healthcare reimbursement, but Memorial Health has resisted movement toward this future.

We understand the importance of Memorial Health to the community. At the same time, it’s reasonable to ask why prices for healthcare services continue to outpace wages, goods and services in the rest of the economy. Anthem has and will continue to offer Memorial Health reasonable payment terms, a continued shift to quality-based healthcare, and fixed pricing models that have proven to improve health outcomes and moderate costs in other Ohio cities.

Steve Martenet

President, Anthem Blue Cross and Blue Shield in Ohio