Back Button
Menu Button

American Hospital Association Advertisement
A Closer Look

A November 15 advertisement in the Wall Street Journal caught my attention – and then my ire. Rick Pollack, President and CEO of the American Hospital Association (AHA), a national organization that represents nearly 5,000 hospitals and health care networks – penned a piece titled, “Fighting for Fair Health Insurance Policies for Patients and Clinicians.”

The advertisement began with the following statement: “Hospitals and health systems put the health and welfare of their patients first. But for some of the nation’s largest commercial health insurance companies, that increasingly is not always the case.”

Pollack continues by asserting health insurance companies have policies that compromise patient care, access to that care and safety. “These include frequent changes to coverage, limited provider networks, delays in authorizing treatment and failure to pay providers in a timely manner.” I must admit, there is some truth to these assertions. Defending insurance companies on many of these issues will not come from me.

Pollack provides a few examples of the atrocities committed by insurance companies, which “blindsides” patients and “puts their health at risk.” Equally abhorrent, are the “billions of dollars in added costs to the health care system,” which “contribute to clinician burnout.” Again, I will not push back on such allegations.

Finally, Pollack goes for the jugular by writing that unjustified behavior by insurance companies is allowed because “commercial health insurance markets are increasingly concentrated and nearly every market is dominated by a single larger commercial insurer.” Yep, this too has some validity.

My ‘Ire’

So why am I incensed by this AHA advertisement? Quite simply, it amounts to the pot calling the kettle black. Finger pointing deflects blame from where it also belongs. Medicine has become more of a profit-incentive business than a public good that cares for patients. The large majority of clinicians serving patients are doing so for the ‘right’ reasons. Unfortunately, the business side of medicine tears away at the sanctity of patient care, leaving doubt in the care we once trusted. 

The AHA and its members are far from faultless on many of the criticisms it throws at health insurers. In fact, the atrocities they commit are swept under the rug and largely left ignored. When transgressions do surface, carefully polished responses are crafted by the AHA and its minions. Below are just a few of the many transgressions committed by the AHA and its powerful members:

  • Leveraged Local Power – Local hospitals infiltrate and hypnotize our communities, business associations and the state legislature to help soften or silence negative pushback on their business behaviors and practices. They often remind us of the “economic impact” they provide to our local economies and the ‘free’ care provided to those without health insurance. This is true, but nonprofit hospitals are exempt from paying most federal and state taxes, which may outweigh the charity care they provide. Because of this economic presence, they feel entitled to be treated with reverence to promote their own business interests. Yet contrary to arguments made by the medical establishment that bloated healthcare equates to more local jobs and serves as a multiplier-effect for local economies, growing our medical industrial complex just does not fit the true narrative of having thriving economies. Consolidation of hospitals, we are often led to believe, will broaden access to care and increase efficiency. As a result, the public will benefit by having “lower costs and improved care.” Yet, many of these mergers serve as a ploy to leverage bargaining prowess with third-party payers to ensure favorable, and more profitable prices. Studies have shown that hospital consolidation is more about enhancing bargaining power and less about integration aimed at reducing costs and providing better, safer care.
  • Opaque Pricing – The hospital price-transparency rule, which took effect this past Jan. 1, required hospitals for the first time to disclose the confidential prices negotiated with health insurers. Despite hospital opposition to this rule, it was implemented to help boost competition and control rising U.S. healthcare spending. According to a Wall Street Journal article in March, hospitals used various methods, including so-called blocking codes, to make it harder for people to search for and download pricing data. The Centers for Medicare and Medicaid Services then recently released a final rule to raise penalties if hospitals do not comply. Not surprisingly, the AHA and other hospital trade groups pushed back. Hospitals around the country are notorious for charging exorbitant and variable prices to patients. Keeping prices opaque is a huge benefit to hospitals, but not to those who pay the bills. Let’s be honest, it’s about the bottom line – healthcare is in the money business.
  • Billing Complexity Equals Medical Debt – Opaqueness in pricing also carries through to how hospitals bill for their services. Hospitals behave as if they are entitled to our money – even if the billing is unfair and inaccurate. Fortunately, we have a new law enacted to protect patients against surprise medical bills, a practice that hospitals have allowed to happen for decades. Medical debt continues to pile up for patients, causing bankruptcy to those with and without health insurance coverage. 
  • Harm to Patients – We have known for years that fatalities due to preventable mistakes made in U.S. hospitals are enormous. In fact, if medical errors were tabulated similarly to other diseases, it is estimated that medical errors would be the third-leading cause of death in this country, behind only heart disease and cancer. It is egregious that death certificates do not list the preventable complications that contribute to the death of patients. The AHA and hospital trade groups whitewash preventable medical mistakes and patient harm as if they don’t happen. Instead, more resources are spent to initiate state laws that implement and enforce tort reforms that protect their backside. Apparently lobbying for such legislation is much easier than actually mitigating the harm they are needlessly causing.
  • Lobbying Power – The hospital and medical community lobbies state legislatures, Congress and federal agencies to influence decisions that benefit themselves, not the public. According to OpenSecrets.org, a nonpartisan, nonprofit, and independent organization that tracks money in U.S. politics,health’ was the top lobbying sector in 2020, spending over $629 million. Since 1998, this sector has dished out over $9.5 billion, edging out ‘Misc. Business’ ($9.4 billion) and Finance/Insurance/Real Estate ($9.36 billion).  ‘Health’ lobbyists represent the American Medical Association, American Hospital Association, pharmaceuticals, and so on. In the $4+ trillion healthcare industry, lobbying efforts can pay off handsomely. The ‘investments’ mentioned above are merely a drop in the bucket for the eventual returns that will come sometime later. 

Bottom Line

The business of medicine should be less about ‘private gain’ and more about ‘public good.’ The monetization of medicine has been designed for the benefit of those who stand to profit at the expense of those who are forced to blindly pay. To be fair, insurance companies are not without fault. However, I see this advertisement as yet another deflection from the real truth. We deserve greater transparency and accountability from those who provide our healthcare and the insurance companies that help pay for such care. Lastly, we must have honest and bold action from those we elect to protect the public’s interests. Unfortunately, patients are an afterthought in this perverse system that too often lacks appropriate accountability.

To stay abreast of employee benefits, we invite you to subscribe to our blog.

Join the Conversation

*