There will be repercussions

If you woke up to see the front-page healthcare headline in the LA Times, you know there will be more about this story in the future.  The article refers specifically to LA City employees not being covered for care at UCLA.  However, the report is indicative of the ongoing turmoil in the U.S. healthcare system.  Although it has been a commonplace to say that uncompensated or under-compensated healthcare costs are passed along to those who do pay, in fact that kind of cost shifting is becoming more difficult to do.

We don't have a single-payer system but the insurance coverage for those with insurance is becoming increasingly concentrated among a few players, in L.A. and the U.S. generally.  You might call it a few-payer system.  Much of the local area is covered by Anthem/Blue Cross and Kaiser (and the latter is a separate system with its own docs and facilities).  So, as a big payer in the local area, Anthem/Blue Cross has negotiating strength and it - and the employers who contract with it - don't have to accept the idea of having to carry "passed along" uncompensated care costs above and beyond the costs of providing services for their members.  Passing along costs that arise because UCLA is a teaching and research institution, to the extent there are such extra costs, also becomes unacceptable.  There are other healthcare providers around who will accept payments reflecting marginal cost without the markup.

The LA Times article is at:
http://www.latimes.com/business/la-fi-hospital-costs-20120921,0,2292633.story