Bargaining Power in Health Plan Negotiations

tennesseanThousands of children have passed through the doors of Vanderbilt’s Monroe Carell Jr. Children’s Hospital. The lobby is bright, full of natural light and decorated in bold colors and kid-friendly shapes such as stars. It hums with the quiet chaos of sick and recovering children.

The building opened as Nashville’s first and only freestanding children’s hospital in 2004 and a $30 million expansion was added this year. And while the hospital does many things for patients every day, its capacity to care for children holds great weight for Vanderbilt’s business side. Namely, the hospital brings the university tremendous bargaining power when discussing reimbursement rates with insurance companies.

“It’s huge, it’s just huge, right?” says Peter Ubel, a professor of marketing and public policy at Duke’s Fuqua School of Business. “If you’re a big employer and you don’t offer an insurance plan that includes that children’s hospital, all of your employees with kids are going to be up in arms” …(Read more and view comments at The Tennessean)

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