Central Ohio hospitals concerned with declining pay from private insurance

The percentage of revenue at Central Ohio hospitals that comes from private insurance dropped by between 1.7 percent to 4 percent from 2007 to 2011, a trend that has left hospitals relying more on payments from public programs (Source: “Decline in hospitals’ revenue from private insurance a reason for concern,” Columbus Dispatch, May 14, 2012).

At the same time, the amount of money statewide paid to hospitals from the state’s Medicaid managed care plans has nearly tripled, from $835 million in 2007 to $2.36 billion in 2011. And that is in addition to the $1.31 billion to $1.75 billion in Medicaid dollars the state pays directly to hospitals.

Because hospitals typically make money on patients with employer-sponsored coverage but lose money on Medicaid patients, a slight change in payer mix can make a significant difference in a hospital’s bottom line. For example, a 3-percent shift away from private payers to Medicaid at OhioHealth from 2007 to 2011 cost the hospital system more than $50 million annually in revenues.