CalPERS May Offer Tiered Hospital Plan To Reduce Costs
The California Public Employees Retirement System may move to a tiered hospital plan that would require members to pay higher out-of-pocket costs at more expensive hospitals, the AP/Sacramento Bee reports. Under tiered hospital plans, health insurers require members who receive care at more expensive hospitals to pay hundreds of dollars in additional copayments. According to health insurers, employers who decide to participate in tiered hospital plans can save as much as 20% on the cost of health insurance premiums (California Healthline, 6/10). Documents released by CalPERS on Friday said that the "dysfunctional" health insurance market requires "drastic restructuring" to reduce costs. CalPERS officials also said that HMOs and PPOs no longer reduce costs "sufficiently." Paul Ginsburg, president of the Center for Studying Health System Change, said that tiered hospital plans appear "better than raising premiums across the board or limiting every employee's health care options." However, hospitals in the state said that the two companies that offer tiered hospitals plans -- PacifiCare of California and Blue Shield of California -- use the plans to reduce costs "with no regard to the quality of health care." Nabil Musallam, who handles managed care contracts at the University of California-Davis Medical Center, said, "If CalPERS comes up with a way to establish tiers that truly account for costs and quality, that would lend real credibility to this idea." The move to a tiered hospital plan in CalPERS, the largest purchaser of health insurance after the federal government, could lead to a new trend in the national health insurance market, the AP/Bee reports (AP/Sacramento Bee, 8/17).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.