Hospitals seek price hikes to offset rising nursing costs – WSJ (NYSE:HCA)
Amid rising nursing expenses, some hospital chains are looking to introduce huge increases in treatment costs It can lead to higher premiums for employers and workers, the wall Street Journal I mentioned on Sunday.
HCA Healthcare Inc. (New York Stock Exchange: HCA) and Universal Health Services Inc. (UHS) is among hospital operators who demand higher payments from payers. Neither company has specified what level of price hikes they are seeking. the magazine She said.
However, people familiar with the conversations say that some health care providers are seeking a 7.5%-15% increase in their rates compared to the 4% to 6% price increases typically requested by hospitals.
Meanwhile, insurers and employers are resisting these groups because they suggest that the most expensive hospital operators, who typically charge more than five times the prices Medicare pays, can absorb the costs without the price hikes.
The requests for price increases come as hospital operators struggle with rising nursing expenses. According to Premier Inc. Inc., a healthcare data analytics company, the median annual base wage for hospital nurses rose to $86,674 in March, from $79,172 in June 2021.
Shares of HCA Healthcare (HCA) crashed after the company’s first-quarter 2022 earnings last month as the company, which operates one of the largest US hospital chains, set its full-year guidance below street expectations amid rising labor costs.
Hospital rates are usually set under long-term contracts with insurance companies and employers. With some discussions about new contracts unlikely to start until 2024, the delay will dampen health spending next year for some employers. However, some hospitals are said to be seeking to renew contracts ahead of schedule to add price increases.
Bryony Wen, the company’s head of contracting operations, said hospitals in talks with health insurer Anthem (ANTM) are asking for small double-digit rate increases compared to historical rates.
Commenting on healthcare provider cost inflation, Sarah London, CEO of a competing managed care provider, Centene (CNC) said in a recent earnings call: “The fact that our pricing is on contract creates a barrier to that but she clearly recognizes the potential for future impact.”