Monday, October 26, 2009

Insurance companies are not telling the truth about the public option!


Contact: Carrie Richardson, Director of Communications
417-874-4503, 417-576-3968

Insurance companies are not telling the truth about the public option!

Springfield, Mo — We have listened far too long to bogus claims by insurance companies that the public option would not be fair competition because they are paying hospitals much more than the government pays. It is not true.

The largest private health insurance company in the nation pays our hospital one-third of Medicare rates for outpatient procedures.

The push for national healthcare reform seems to be nearing the finish line. If there is a single issue getting the most attention, it is the public option. There is one argument that has proven the most difficult for proponents of the public option to counter: the private insurance sector claims it “subsidizes” what the government pays for healthcare. Because Medicare pays less than the actual cost of care, hospitals and doctors depend on private insurance to pay more.

If true, it makes a public option, whose payments would be tied to Medicare rates, not only fundamentally unfair to the private insurance companies who could not compete because they would be paying more to insure the same care, but an economic disaster for hospitals and doctors who depend on better paying private insurance to make ends meet. The advocates of a public option typically counter by claiming that the private insurance sector is currently making billions in profits and will no doubt survive despite the competitive advantage of the public option.

Few have offered proof that the underlying claim—that private insurance pays more than Medicare—is not true.

We will.

We do not claim to know how much the private insurance companies are paying other hospitals, but we do know that the largest private insurance company in the nation is paying our hospital less than Medicare—much less. For an outpatient procedure that costs our hospital almost $800, Medicare pays us $614 and Blue Cross and Blue Shield pays us $236. For another, Medicare pays us $2789 and the Blues pays us $932. It is not an exception; it is the rule. There are no outpatient procedures performed at our hospital as to which Medicare does not pay us substantially better than the Blues. So, while it is true that Medicare does not pay us enough to cover the actual cost of the service, it is certainly not true that the Blues are somehow subsidizing the cost of care at our hospital.

We would welcome a public option.

Our CEO Paul Taylor has written a letter on behalf of OCH giving proof that insurance companies are making bogus claims and how that can effect the public’s access to healthcare. Read the full letter at

Ozarks Community Hospital is a 45-bed acute care provider-based facility located in Springfield, Missouri. OCH was created to support those in need of quality healthcare in the Ozarks. Approximately 80% of the patient population we serve daily includes Medicare, Medicaid, Tricare and a substantial number of uninsured patients.

For more information visit us at,, follow our healthcare reform blog or become a fan of us on Facebook. Feel free to contact Carrie Richardson, Director of Communications at or by phone at 417-874-4503.

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