I don’t know what’s going on at UnitedHealth Group, but I am missing the strategic subtlety of this latest move. If I were trying to manage PR for the biggest and most profitable health plan in the country, and I found that my CEO had made hundreds of millions of dollars by (definitely unethically and presumably illegally) back-dating option grants, I wouldn’t want to see a major regional subsidiary written up in the New York Times about how it’s aggressively targeting one of New York City’s poorest safety-net hospitals. Apparently the hospital thought it had agreed a contract, but eventually they noticed that they were being paid at the old rate. When they enquired as to why, Oxford (which United bought in 2004) brought up other issues and the whole thing has since escalated to the close to nuclear option.
This spring, Oxford told hundreds of doctors and thousands of its subscribers that it would no longer pay for medical care at Jamaica Hospital Medical Center, and gave them a month to make new arrangements. It told some doctors that they, too, would no longer be allowed to participate in the Oxford plans, and it told many patients that they needed to find new doctors.
Now we tough Californians are used to this stuff—and usually used to the insurer losing. But the concept is new in New York apparently, and it’s just dreadful PR to use it on Jamaica hospital, which is that hospital in the run down part of Brooklyn that most wealthy Manhattanites only stare at out of the cab window when they’re heading to JFK
Kenneth E. Raske, president of the Greater New York Hospital Association, a trade group, said: "I field complaints from hospitals about insurers every day. But I have never seen anything like this." Jamaica Hospital, on the Van Wyck Expressway near Jamaica Avenue, serves a largely poor population with many immigrants and a large number of uninsured patients. It is generally considered well managed, but has had serious losses in recent years. Officials say it merely broke even in 2005.
There may be good business reasons for United to be doing this. Lord knows health plans have spent precious little time or effort in recent years trying to contain the excesses of the system on their clients’ behalf. But surely going after a hospital that relies on its better paying customers to keep the lights on for the poor is not going to generate the kind of PR that the company needs.
Is Mr Spitzer watching? I suspect so…