"This new study shows that cost-shifting is driving up the costs of health care for all consumers," said Scott P. Serota, President and CEO of the Blue Cross and Blue Shield Association. "As our nation embarks on comprehensive healthcare reform-and we collectively strive to extend coverage to all, improve quality of care and keep healthcare affordable for future generations-cost-shifting is one of the areas where we should focus our attention."

"This study quantifies the 'hidden tax' that cost-shifting imposes on families and employers across the nation," said Karen Ignagni, President and CEO of America's Health Insurance Plans. "As Congress and the new administration focus on health care reform, they should confront this issue."


Also hospitals and physicians in some areas may not be able to offset low public payments with higher commercial payments creating additional financial pressures. In addition to this hidden tax, the privately insured also must bear the costs associated with bad debt and charity care provided to individuals without insurance, which is not separately quantified in this report.

"As we consider approaches to expand coverage nationally, we need to keep in mind the disparity among Medicare, Medicaid, and commercial provider payment rates, and the pressure that this disparity places on hospitals, physicians, and commercial payers," said John Pickering, Principal and Consulting Actuary at Milliman, Inc., who co-authored the report with Will Fox, also a Principal and Consulting Actuary at Milliman, Inc.

Milliman is an independent consulting firm that was engaged by AHIP, AHA, BCBSA and Premera Blue Cross to develop a best estimate of the cost shift in the United States. Hospital findings are based on analysis of the 2006 AHA Survey data. The survey includes data on the 4,927 short-term, community hospitals in the U.S. The data represent each hospital's fiscal year 2006 results. The physician findings are based on 2007 fee schedule levels for Medicare, Medicaid and commercial payers. For more information and the full report please go to http://www.bcbs.com/news/bluetvradio/cost-shift-study-2008/.

About AHA

The AHA is a not-for-profit association of health care provider organizations and individuals that are committed to the improvement of health in their communities. The AHA is the national advocate for its members, which includes more than 5,000 member hospitals, health systems and other health care organizations, and 38,000 individual members. Founded in 1898, the AHA provides education for health care leaders and is a source of information on health care issues and trends.

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