Sacramento Business Journal Examines Trend Toward Tiered Hospital Plans
The Sacramento Business Journal last week examined the increased number of large health insurers statewide that have established tiered hospital plans. Since Jan. 1, PacifiCare of California, Blue Shield of California, Blue Cross of California and Health Net of California have unveiled tiered hospital plans (Robertson, Sacramento Business Journal, 10/25). Under tiered hospital plans, health insurers require members who receive care at more expensive hospitals to pay hundreds of dollars in additional copayments (California Healthline, 10/21). According to health insurers, tiered hospital plans can save employers as much as 15% on the cost of health insurance premiums and make patients "more aware of the high cost of hospital care." Hospitals officials, however, criticize the plans as a move by health insurers to "take back some of the clout" that they lost in contract negotiations over the past few years. They add that the plans assign hospitals an "arbitrary" rank based on price, not quality, and do not consider the differences between hospitals and the patients that they serve. "We believe these products are a short-sighted, ill-conceived reaction to some serious issues facing our industry. They simply shift costs from employers to consumers and that doesn't represent a solution," Bill Gleeson, a spokesperson for Sutter Health, said. Employers have expressed "mixed" reactions to the plans, the Business Journal reports. Dale Waters, an insurance broker, said, "Hospitals may not like the system, but employers do. From the employer prospective, hospitalization is not a priority for them. It's utilization and premium. Any design that shaves that is good for them" (Sacramento Business Journal, 10/25).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.