Skip to main content

The Influence of Insurance Companies on Healthcare Policy and Practice

Insurance companies are key players in the U.S. healthcare system, and their influence on affordable care is a topic of increasing interest among media outlets and policy experts. Barring significant changes, commercial payers will continue to shape, in some capacity, the policies and practices that impact patient access and healthcare costs.

Understanding these factors is paramount for those aspiring to a career in healthcare administration. The University of North Carolina at Pembroke (UNCP) recognizes this need and offers an online Master of Business Administration (MBA) in Healthcare Administration program. In addition to other proficiencies, this unique program is designed to equip future leaders with the expertise to navigate the market influence of insurance companies. Graduates emerge with a balanced understanding of current healthcare policies and practices within an insurance-driven system, ready to be thought leaders and change-makers in the industry.

How Do Insurance Companies Affect Healthcare Costs?

Insurance companies employ various tactics to control costs, which can contribute to higher patient costs while limiting access to care. For example, insurers often set low reimbursement rates for providers, require prior authorization for specific treatments and exclude some services from coverage. Stringent utilization reviews and excessive claims denial processes — even for correctly coded claims — are among the strategies to limit or delay healthcare usage and payment.

According to an American Hospital Association (AHA) article on insurer policy impact, these practices force providers to spend significant time and resources navigating the insurance system, diverting critical attention and energy away from direct patient care. The AHA states that “inappropriate use of prior authorization and step therapy add substantial and unnecessary administrative costs to the health care system — both in terms of staff time and the technology and software needed to comply with these policies. They also can delay patients’ access to care, which may make caring for these patients more resource intensive if their condition deteriorates.”

What Barriers to Care Do Insurance Companies Create?

Unfortunately, as insurance companies’ influence expands, they frequently create even more barriers to timely and affordable care. These include enforcing narrow provider networks that restrict patient choice, demanding high deductibles and copays, and issuing denials of coverage for essential services. According to Rick Pollack, writing for U.S. News & World Report, insurers are even “preventing some individuals from continuing to get their cancer infusion therapies from their long-standing providers and instead forcing them to go to new providers not connected to their care team.”

These policies impose a heavy logistical and financial burden on patients, leading many to delay or forgo needed care due to confusing rules and cost concerns. The barriers also result in additional administrative time for healthcare facilities and providers as they attempt to resolve coverage issues.

What Is the Impact of Insurers’ Administrative Policies on Healthcare Employees?

The AHA reports that 84% of nurses agree that insurers’ administrative policies delay patient care. Meanwhile, 80% of physicians say these tactics demand excessive attention, pulling them away from direct clinical care. According to the AHA insurer policy impact article, removing some of these burdensome policies could contribute to more effective, timely care, reducing provider stress and U.S. healthcare expenditures by more than $265 billion annually.

To combat these challenges, administrative professionals must develop the skills to analyze insurance markets, payments and operational sustainability. MBA in Healthcare Administration students at UNCP learn these foundational concepts in courses like Health Economics, where they explore health insurance structures and reimbursement models.

What Are Some Initiatives to Address Rising Healthcare Costs?

Lawmakers have attempted to address insurance issues through various policy proposals. The Congressional Budget Office states that healthcare payment reform measures include promoting greater market competition and price transparency and capping the growth rate of healthcare prices. However, progress has been slow because of the complexity of the insurance market.

More than ever, healthcare organizations need administrators with broad expertise in health economics, payer markets and strategic management. These individuals can bring innovative solutions that address the root causes of accessibility and affordability in healthcare.

Learn more about UNCP’s online MBA in Healthcare Administration program.

Related Articles

Request Information

Submit this form, and an Enrollment Specialist will contact you to answer your questions.

  • This field is for validation purposes and should be left unchanged.

Or call 844-302-7886

Take the next step

Start your application today!

Or call 844-302-7886 844-302-7886

for help with any questions you may have.