Hospitals Owning Insurance Plans Raise Concerns

A growing trend of hospitals owning insurance plans, known as 'payviders,' has raised concerns about potential gaming of regulations and harm to competition. Research has shown that patients enrolled in hospital-owned Medicare Advantage plans tend to have better experiences, care quality, and coordination. However, there is evidence that hospitals may be able to game the system by recording more diagnoses to receive higher government payments. Additionally, hospital-owned plans may pay affiliated hospitals higher prices, allowing companies to inflate their plan costs and skirt medical loss ratio rules. The trend also raises concerns about competition, as hospitals may use their ownership to negotiate higher prices with competing insurance companies.