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California health insurers blame rising hospital costs for premium increases

As health insurers again increase premiums on thousands of subscribers, the industry is seeking to shift the debate over escalating health care costs to the rising price of hospital care.

In California, hospital prices jumped 150 percent since 2000, according to a study of state hospital data conducted by America's Health Insurance Plans, the industry's trade association.

"What this data shows is that there needs to be much greater focus on the underlying cost of medical care that is driving those premium increases," said Robert Zirkelbach, a spokesman for the group.

"At some point, people will have to address these underlying cost drivers if health care costs are going to come down."

To gauge prices, AHIP used inpatient revenue self- reported by California hospitals to the Office of Statewide Health Planning and Development.

In California, the prices charged to commercial health plans rose by 159 percent from 2000-2009 – more than twice the rate of increase for Medicare, which serves mostly seniors, and more than eight times that for Medi-Cal, the government insurance program for the poor.

"The report's focus on California hospital costs just reinforces what we have been saying the past couple of years. Steep increases in medical costs must be addressed. Our country and state cannot sustain this kind of growth," said Patrick Johnston, president of California Association of Health Plans.

The health insurers' group acknowledged the challenges faced by hospitals and other medical providers as they provide free care to those without insurance or those too poor to pay.

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