Revive releases results of fourth annual National Payor Survey of hospital executives

Apr 1 2010

Revive, a national public relations firm specializing in Health Care and Healthy Living, today released the results of its fourth annual National Payor Survey of hospital executives. The only one of its kind in the country, the survey targeted hospital leaders in the industry who negotiate managed care contracts with national health insurance companies - CEOs, CFOs, and directors of managed care. Participants represent 24% of hospitals in the U.S., up from 18% last year.

“It's clear that hospital executives are frustrated”

With the health reform debate on the forefront of national discussions, there is much talk about the current health care delivery system and, in particular, how national insurance companies conduct business with patients, physicians, hospitals, and health systems across the U.S. The Revive survey gives a behind the scenes look from the people who deal directly with insurance companies when negotiating contracts.

The survey gathered data on hospital leaders' opinions on seven of the largest health insurers or insurer groups in the nation: United HealthCare, CIGNA, Aetna, Coventry, Humana, Wellpoint/Anthem, and the local state or regional independent non-profit Blue Cross or Blue Shield plan. Participants were asked to rate insurance companies on more than a dozen categories, from image and reputation to detailed contract negotiation and claims processing issues. The survey was anonymous to protect hospitals from retaliation by payors who may not have appreciated the criticism or ratings.

While all respondents tend to regard insurance companies as equally negative when it comes to business practices, each year's survey has revealed United HealthCare as the clear outlier. For four years, United HealthCare has been consistently ranked as the worst among respondents in all survey categories and a clear trend has emerged. This year, WellPoint/Anthem saw declines that brought the company down to levels near United HealthCare.

While United HealthCare showed some improvements year over year, it was still ranked least favorable compared to other major payors. This year's survey revealed 65% of respondents indicated an unfavorable opinion of United HealthCare, which is actually a 33% net improvement over last year's survey - a big positive jump for United HealthCare in this category. Conversely, nearly three quarters (70%) of respondents gave United HealthCare a negative rating when dealing with hospitals.

"It was interesting to see that after four years of doing this survey, United is still ranked among the worst in all categories," said Brandon Edwards, President of Revive. "While others, like WellPoint/Anthem, saw significant declines in key areas, United is still far and away the most difficult payor to deal with according to survey respondents. This doesn't discount the improvements United has made - some more significant than others - yet they still have more to do when compared to other major insurance companies."

Survey results also showed a decline in WellPoint/Anthem's reputation with hospital executives. In fact, they ranked second behind United HealthCare for most difficult payor and worst hospital payment rates. Anthem has been in the national spotlight recently for its premium rate increases and the recent negative attention has appeared in the survey results. Anthem dropped 5% in the category of best/worst for dealing with hospitals and 8% for hospital payment rates.

"It's clear that hospital executives are frustrated," said Nathan Kaufman, managing director for Kaufman Strategic Advisors. "They see WellPoint/Anthem and other payors increasing their premiums upwards of 20% each year, yet reimbursement rates being offered to providers have stayed in the range of 3-5%. Health providers, and consumers, want to know where those extra dollars are going if not to pay for care. Hospitals are struggling financially - many are operating in the red, and for those in the black, a 2% to 3% margin is about as good as it gets."

Among the most favorable payors, Aetna topped the list for the fourth year in a row, followed by CIGNA. Sixty eight percent of respondents gave Aetna a positive rating, the highest rating among all insurance groups tested. CIGNA was a close second, with a 65% positive rating.

With health reform as a hot topic, the 2010 Survey included specific questions around the health reform legislation and the role it plays on health providers' relationships with private insurance companies. More than 65% of all respondents believe that the passage of health reform would result in a decrease in reimbursement rates from private payors, putting more financial strain on health providers. Moreover, while the reform legislation is designed to reduce the number of uninsured individuals receiving care, 68% of respondents do not believe this reduction will make up for lower private payor rates.

For the first time, this year's survey also polled 800 private health plan members from all 50 states to gather opinions about their own health insurance plans. Results showed participants are generally satisfied with their health plan, but noted the difficulty most people have in dealing with their health insurance company. High costs and poor coverage were identified as major issues with today's health plans. A majority (64%) of respondents favored insurance companies spending more of the premium dollar on actual care than on profit or bureaucracy.