Wall Street Journal Examines Health Insurers’ Tiered Hospital Plans
The Wall Street Journal today reports on the trend of tiered hospital plans, which are designed to encourage patients in commercial managed care plans to utilize hospitals that cost insurers less. Under tiered hospital plans, health insurers charge beneficiaries who receive care at more expensive hospitals "significantly higher copayments." Copayments range up to $250 per day for preferred facilities and up to $400 per day for treatment at a "nonpreferred hospital." The Journal reports that the system, based on tiered pharmaceutical plans that charge higher copayments for brand-name medicines, is an attempt by the managed care industry to address employer concerns about higher premiums and medical costs. PacifiCare of California, UnitedHealth Group and Humana already offer tiered hospital plans. Most major insurers intend to offer such plans within two years, according to Tom Beauregard, a health care consultant with Hewitt Associates. Health plans hope that the tiered hospitals system will limit premium increases to single digits without restricting access to hospital care, the Journal reports. They add that the plans help patients choose hospitals based on "both quality of care and cost." Hospitals, patients advocates and providers, however, say the plans adversely impact providers and limit patients' health care choices. "Hospitals are standing up at the negotiating table and telling insurers that they had better pay decent rates. The tiering is about HMOs trying to get the upper hand again," Jan Emerson, a spokesperson for the California Healthcare Association, said. "It is not about the quality of care. This is purely economic politics," she added (Bennett, Wall Street Journal, 6/6).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.