Anthem Myth vs Fact
Anthem (Elevance) recently published a number of misleading statements about its contract negotiations with Sauk Prairie Healthcare. Anthem is oversimplifying what is a very complex topic in an effort to sow misunderstanding and anger toward Sauk Prairie Healthcare. We’re providing the below information to set the record straight.
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Anthem Myth:
“Sauk Prairie Hospital is charging commercial customers nearly 4x
the rate of Medicare.”
SPH Fact: Anthem is twisting Medicare rate numbers into deceptive speaking points
to make themselves look like victims. At Sauk Prairie Healthcare, as with
hospitals nationwide, Medicare and Medicaid reimbursement levels do not
cover the cost to provide services to patients. Because of that, hospitals
need to receive higher payments from commercial insurances than they do
from Medicare and Medicaid; this has been the case for decades (in the
industry, this is called “cost shifting”). In fact, in 2022,
SPH’s costs to provide services to Medicare and Medicaid patients
was $6.5 million more than what we were paid.
Anthem Myth:
“Anthem has offered reasonable payment increases like those accepted
by other area health systems.”
SPH Fact: It’s easy for Anthem to make this claim because they don’t
have to back it up. Anti-collusion laws make it illegal for health systems
to share the financial details of their negotiations so Anthem can make
any claim they want without having to prove it to you. This is a classic
apples to oranges comparison because each insurance plan/hospital negotiation
is unique. For example, increases are all relative to what the starting
point is, e.g. if hospital A starts at $100 and accepts a 3% increase
and hospital B starts at $60 and accepts a 3% increase, then hospital
A gets more money. In Anthem’s misleading statement, they’re
talking in percentage increases not actual dollar increases.
Anthem Myth:
Sauk Prairie Healthcare remains “…steadfast in their efforts
to significantly increase local health care costs for Anthem members,
employers and families in the County.”
SPH Fact: In our negotiations with Anthem, we proposed an increase in reimbursement
between 4-5% overall. We believe this increase is reasonable and fair
as inflation has increased the price of everything, and healthcare is
no exception. Just like other businesses, we need to be able to keep up
with the rising costs of labor and supplies. We need to offer competitive
wages and benefits to recruit and retain our incredible team members who
live in our communities.
For Sauk Prairie Healthcare, our motivation is straightforward and transparent:
we are a not-for-profit community health system that needs to keep pace
with rising labor and supply costs — we don’t pad the numbers
to pay shareholders. Whereas Anthem is a very large, national, for-profit
company that claims to be committed to protecting affordability for its
members. Consider that WI Anthem’s latest financials show their
income from premiums increased 31.4% in the last two quarters of 2023
and their enrollment was flat, meaning they’re charging more per
enrollee. So if they are charging employers and enrollees more while reducing
reimbursement to providers, who is coming out ahead?
See BCBS WI 2023 3rd Quarter Statement filed with the Wisconsin Office
of the Commissioner of Insurance:
https://wisconsinhealthnews.com/wp-content/uploads/2024/04/OCI_FIN_Financial_Statements-11-10-2023-Blue-Cross-Blue-Shield-of-Wisconsin-2023-3rd-Q-Confidential-No.pdf
See BCBS WI 2023 Annual Statement filed with the Wisconsin Office of the
Commissioner of Insurance:
https://wisconsinhealthnews.com/wp-content/uploads/2024/04/OCI_FIN_Financial_Statements-2-28-2024-Blue-Cross-Blue-Shield-of-Wisconsin-2023-4th-Q-Annual-Confidential-No.pdf
Anthem Myth:
“We even offered to extend our current agreement to allow more time
for discussions.”
SPH Fact: Sauk Prairie Healthcare did extend the negotiations for three months until
March 31 in good faith. Unfortunately, after their February proposal,
Anthem stopped working toward a middle ground and unlike other health
plans who agree to retroactively pay at the new agreed upon rates, Anthem
was not willing to do this. Therefore, the longer the negotiations continue,
the longer we get paid at the lower, previous rate and Anthem saves money.
We understand this to be a common tactic Anthem uses and, in our case,
they then spun this into a deceptive speaking point to make themselves
look well-meaning.
Anthem Myth: “Sauk Prairie is already a very expensive place to receive care,
currently charging Anthem members and employers an eye-popping 45% more
than state average.”
SPH Fact: Again, Anthem is twisting words to make you believe that Sauk Prairie
Healthcare is out of line and taking advantage of Anthem members. “Charges”
do not reflect what Anthem actually pays for services. As with all insurance
contracts, the insurance company pays a negotiated rate (which is sometimes
calculated at a discount off charges), not the actual charge.
Anthem Myth: “Sauk Prairie is demanding to hike prices even further at rates two
times inflation.”
SPH Fact: There are many reasons why Sauk Prairie Healthcare has chosen, over the
years, to try and keep charges low, the most important of which is to
make healthcare more affordable for individuals who don’t have any
type of insurance coverage. However, at the beginning of our negotiations,
the Anthem contract rep indicated SPH’s charges are too low, and
that we needed to increase our charges more so that they could present
to employers that they were able to negotiate a discount on our standard
charge. Anthem feels it’s easier for them to sell insurance if they
show larger discounts. So their policies require providers to increase
the amounts we charge or they limit the reimbursement providers receive.
For the past few years, SPH’s charge increases have been an overall
increase of 3% applied to all services. To meet Anthem’s demands,
for 2024, SPH agreed to increase prices an overall 6.89%.
Anthem Myth: “… Wisconsinites covered by their employer or through the
ACA currently pay about three times more than Medicare pays for the exact
same services.”
SPH Fact: Again, Anthem is twisting Medicare rate numbers into deceptive speaking
points to make themselves look like victims (see previous Anthem Myth
for details).
Anthem Myth:
“Wisconsinites already face some of the highest healthcare costs
in the country.”
SPH Fact: According to the Kaiser Family Foundation, Wisconsin is 28th in the country
and according to Forbes Wisconsin is 25th
https://worldpopulationreview.com/state-rankings/health-care-costs-by-state
Anthem Myth:
“It’s troubling that Sauk Prairie leadership would walk away
from negotiations, despite our efforts to address their concerns and reach
a new agreement.”
SPH Fact: Our negotiations with Anthem went back and forth for 6 months before reaching
the original deadline of December 31. While we hadn’t yet reached
an agreement, we did feel we were very close so agreed to extend the contract
to March 31 while negotiations continued. We tried to negotiate a middle
ground that still allowed us to cover cost increases. However, after Anthem
made a proposal in February, they ceased trying to find middle ground.
Despite them giving us the same proposal in March with no changes, we
continued to make revisions to each of our proposals, moving further in
their direction. The contract extension was through March 31, but Anthem
indicated their proposal would expire on March 29; a tactic to further
pressure us into accepting their proposal. Although Anthem has walked
away from the negotiations, we have made it clear that our offer is still
on the table.
Anthem Myth:
Anthem is committed to protecting affordability for its members.
SPH Fact: As an insurance company, Anthem’s duty is to support patient needs,
yet they are choosing to take away enrollees’ access to their providers.
When employers choose an insurance plan for their employees, they do so
with an understanding of which providers are in-network. For patients,
Anthem’s change to their provider network mid-year creates the stress
of finding new providers and expense and inconvenience of traveling farther
to get care. Anthem enrollees who pay premiums are now getting far less
value for their money.