The challenge of managing healthcare costs

Did anyone else read the June 10, NY Times story about Geisinger Health Plan’s request for a 40% increase in its plan offerings in the individual market? This is an organization that has been heralded as the best in class in managing healthcare quality and costs. It is a fully integrated system with a dominant position in its market. It has over 540,000 members in the Geisinger Health Plan in 2015 and employs over 30,000 doctors.

The Geisinger Health System had a 3.5% margin ($127 million) on $4.6 billion in revenue in 2015. The article did not speak to utilization patterns that are driving higher costs. It did suggest that regulators had perhaps artificially constrained premiums.

I think we have to be concerned if even Geisinger is challenged in constraining healthcare costs.