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Great article! There are two primary ways to control healthcare costs. The examples from Community, Hendricks, Hancock, Parkview, and others show the effectiveness of combining both strategies.
Because healthcare is a pay-for-service system, large insurance carriers traditionally use rationing as a strategy to lower costs. Rationing includes narrow networks, prior authorization, utilization review, formularies, and step therapy.
The other approach is to improve the health of the population. To state the obvious, this works because healthy people spend less on healthcare services.
What these hospital systems have done is use narrow networks to capture people within a system of care and focus on improving quality. The fact that their rates are lower and are not going up is proof that this can work.
There are ways that large insurance companies can compete by employing different strategies to improve population health; however, for now, hospital systems have the upper hand.