Hospitals Offer Extra Amenities To Draw Privately Insured Patients

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The AP/San Francisco Chronicle on Wednesday examined the new trend of hospitals providing extra incentives to "lure in" patients covered by private insurance, which pays higher reimbursement than government programs such as Medicare or Medicaid. According to the AP/Chronicle, hospitals "are finding it pays to pump up perks" for visitors, such as gourmet food, cooking classes, patient concierges, internet access, walking trails and valet parking. In addition, many hospitals offer single rooms, which have been made more available because of federal regulations protecting patient privacy, according to the AP/Chronicle.

The AP/Chronicle reports that hospital leaders say that "these extra touches all have a purpose." According to the AP/Chronicle, the incentives offer stress relief. Rick Wade, senior vice president of the American Hospital Association, said that because of outpatient treatment services, fewer patients now stay in hospitals. Those who do typically receive "pretty intense treatment," he said, adding, "The revolution now is to find any way possible to reduce the stress, reduce the tension, reduce the anxiety." Gerard van Grinsven, CEO of Henry Ford Health System, said that some patients "are not satisfied anymore in getting traditional medical care," adding, "They want activities and programs to help them in their physical and mental well-being."

According to the AP/Chronicle, "[c]ompetition also plays a role" in the hospitals adding extra benefits. James Atkinson, chief of pediatric surgery at the University of California-Los Angeles' Ronald Reagan Medical Center, said, "If a patient has free choice to go to this hospital or that hospital, they're going to choose the one that has the better amenities." Rick Gundling, a vice president for the Healthcare Financial Management Association, said that extra amenities help attract physicians, who in turn bring in more patients. Debra Draper, an associate director of the Center for Studying Health System Change, said it has become a "medical arms race" between hospitals, the AP/Chronicle reports.

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The AP/Chronicle reports that the trend has increased because state laws that previously required hospitals to demonstrate an unmet need for beds before granting construction privileges have been weakened and defeated in court, which has allowed hospitals to move into markets with more potential patients with private coverage. According to the AP/Chronicle, hospital officials say that strategy has allowed them to bring in more money to cover expenses, take on charity cases and invest in technology.

Criticism

Some medical officials said there is "a chasm deepening between hospitals pushing into leafy suburbs to grab market share and those serving poorer patient populations," according to the AP/Chronicle. The AP/Chronicle reports that the extra incentives "are still not the same at hospitals that serve the poorest patients."

Matt Gutwein, CEO of Wishard Memorial Hospital, said that hospitals that serve low-income patients do not have amenities of such caliber. He said he does not "begrudge hospitals that spend more lavishly" because the U.S. health care system pressures many hospitals to attain commercially insured patients in order to balance lower reimbursement from government payers or no payments from the uninsured, according to the AP/Chronicle (Murphy, AP/San Francisco Chronicle, 12/3).

Reprinted with permission from kaisernetwork.org. You can view the entire Kaiser Daily Health Policy Report, search the archives, and sign up for email delivery at kaisernetwork.org/email . The Kaiser Daily Health Policy Report is published for kaisernetwork.org, a free service of The Henry J. Kaiser Family Foundation. © 2007 Advisory Board Company and Kaiser Family Foundation. All rights reserved.

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