Herein lies a fundamental challenge with our healthcare system….
While providers and patients suffer with underpayments and balance billing issues….
This could be the banner article for payment reform as providers struggle to survive.
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Health systems suffer while payer profits soar
Laura Dyrda
11/3/22
https://www.beckershospitalreview.com/finance/health-systems-suffer-while-payer-profits-soar.html
Large health systems are reporting big losses this year while insurers continue to turn billion-dollar profits.
Humana reported $1.2 billion in third quarter profits, a slight drop from the same period last year. The company has focused on regaining Medicare Advantage market share and increased quarterly revenues 10.2 percent year over year.
Cigna's third quarter profits jumped 70 percent year over year, hitting $2.8 billion. The company reported $45.3 billion in third quarter revenues and raised its annual earnings outlook based on the results. The company now projects $179 billion for full year 2022 adjusted revenue.
CVS Health also beat investor expectations in the third quarter and raised its earnings outlook. The company's third quarter revenue jumped almost 10 percent year over year to $81.2 billion, although it reported $3.4 billion in losses after agreeing to pay into a $5 billion global opioid lawsuit settlement over 10 years.
At the same time, health systems are reporting multimillion and even billion-dollar losses. Chicago-based CommonSpirit Health reported $1.3 billion operating loss for the 12-months end on June 30. Ascension, based in St. Louis, also reported a $1.8 billion loss for the fiscal year's end in June.
Community Health System reported a $42 million net loss for the third quarter in October and both Dallas-based Tenet Healthcare and Nashville, Tenn.-based HCA Healthcare reported more than 50 percent drops in quarterly net income from 2021 to 2022.
The profitability mismatch between the nation's largest payers and health systems of all sizes will be front and center during contract negotiations in the coming year. There have already been high profile contract impasses between insurers and large systems, with some leading to contract termination.
