End of Exclusive Contracts, Hospital Expansion Raise Cost Concerns in Greenville

Growing Number of Uninsured, State Budget Shortfalls Threaten Safety Net Care

News Release
June 3, 2003

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Alwyn Cassil: (202) 264-3484

ASHINGTON, D.C.—The end of exclusive contracts between dominant Greenville Hospital System (GHS) and two major health plans, along with increased hospital expansion, may signal higher health care cost growth in Greenville, S.C., according to a new Community Report released today by HSC.

With the demise of the exclusive contracts, BlueCross BlueShield of South Carolina and CIGNA both lost deep price discounts from GHS in return for excluding rival Bon Secours St. Francis Hospital from their provider networks. At the same time, hospital construction projects have increased, as competition heats up in previously uncontested geographic areas with significant population growth. Hospitals also are competing for lucrative specialty services, including cardiac and cancer care, in part because physicians are adding capacity to perform more procedures in their offices.

"Greenville hospitals are expanding capacity and competing for lucrative specialty services, at the same time employers are facing another year of double-digit health insurance premium increases," said Paul B. Ginsburg, Ph.D., president of HSC, a nonpartisan policy research organization funded exclusively by The Robert Wood Johnson Foundation.

Other key findings of the report, Market Developments Signal Cost Hikes in Greenville, which is available by clicking here, include:

• Employers are shifting more health costs to workers through higher deductibles, copayments and coinsurance.
• Despite significant safety net expansions, access to care in downtown Greenville declined as the number of uninsured people increased and GHS cut services at outpatient clinics.
• Facing a large budget shortfall, the state has made Medicaid and State Children’s Health Insurance Program enrollment more difficult, and more severe cuts are feared.

Greenville is one of 12 communities across the country tracked intensively by HSC researchers through site visits and surveys. The new report is based on a January 2003 site visit and interviews with more than 65 health care leaders, representing health plans, employers, hospitals, physicians and policy makers.

The Center for Studying Health System Change is a nonpartisan policy research organization committed to providing objective and timely insights on the nation’s changing health system to help inform policy makers and contribute to better health care policy. HSC, based in Washington, D.C., is funded exclusively by The Robert Wood Johnson Foundation and is affiliated with Mathematica Policy Research, Inc.