The $25M Price Tag To Escape NewYork-Presbyterian Hospital

Do big hospitals have too much power?

A not-so-new feud between NewYork-Presbyterian Hospital and union health fund 32BJ has reached a fever pitch. The union fund was on the cusp of signing with Aetna to cover its 210,000 members when a hospital-sized roadblock popped up.

Due to the hospital's prices, 32BJ wanted to exclude it in its new contract. However, Aetna’s contract requires the insurer to get a signoff from the hospital in order to omit it from a client's plan.

According to New York Presbyterian, 32BJ owes the health system over $25 million in medical service bills and is barring 32BJ from signing with Aetna until those bills are covered. Without the payment, Aetna can’t offer the plan the union fund wants.

32BJ says it has no current plans to pay the hospital.

“We were totally shocked. That’s just not how business is done,” said Peter Goldberger, executive director of the union’s benefit funds, speaking to the Wall Street Journal. He added that NewYork-Presbyterian never brought up the charges prior to the union fund attempting to sign with Aetna.

The union health plan spends about $1.5 billion a year covering members—who typically hold occupations such as cleaners, maintenance workers and airport staffers—and their families.

Last year the union health fund spent roughly $22.5 million on care at NewYork-Presbyterian alone.

This led 32BJ to call off signing with Aetna, who they said they do not blame for the situation.

The union fund will continue with its current partner Elevance’s Anthem, which has not included NewYork-Presbyterian in its network since 2022.

The Price Problem

NewYork-Presbyterian’s prices reflect those of big hospitals that command premium rates with private insurers. These demands are high, and sometimes guarantee that the health system will be included in all of an insurer’s networks, even if a client doesn’t want them.

Contract terms like these negatively affect insurer’s clients, usually employers and unions, making it harder for them to guide patients to lower-priced health systems. Employers end up staying in them, despite not knowing what they are paying, and services potentially costing double what the government would pay.

Hospital prices have been a major pain point lately, and data shows they usually pay far more than Medicare rates. There’s also been pushback from other groups that say Medicare rates are far too low and don’t cover the cost of care. Regardless of where the numbers fall, employers need access to pricing data for their health plans.