Hospitalization Costs to Rise Under PacifiCare Plan
By LAURENCE DARMIENTO
Santa Ana-based PacifiCare Health Systems Inc. is offering a new California plan that cuts employer premiums up to 20%,but only by socking enrollees with co-payments of up to $400 a day for visits to certain “pricey” hospitals.
The plan is intended to cap what studies have shown to be a leading cause in the recent, rapid rise of health care costs: demands by hospitals for higher rates of reimbursement.
But already the hospital industry is attacking the plan as little more than a new ploy by insurers to regain the upper hand in contract negotiations.
Under the Select Hospitals Plan, businesses with at least 50 employees can get premium reductions of 5% to 20% compared to the rates of the insurer’s regular health maintenance organization. But the discount comes with strings.
Instead of being able to choose without restriction among all 230 hospitals under contract with PacifiCare, employee enrollees must make a selection based on a tiered pricing plan.
They can still avoid hospital premiums, a common advantage of HMOs, by choosing hospitals on a “select” list that PacifiCare says negotiated favorable and reasonable reimbursement rates with it.
But if they choose a hospital not on that list, they would face hospital co-payments of $100, $250 or $400 a day, depending on their employer’s premium discount.
“It’s a way for us to have employers save some money,” said Cheryl Randolph, a PacifiCare spokeswoman. “But there are still a lot of great hospitals on that (select) list.”
About half the hospitals PacifiCare contracts with statewide are on the “select” list, including those of Tenet Healthcare Corp., Orange County’s largest hospital operator.
Randolph said that PacifiCare made efforts to inform hospitals statewide about the plan, and it was an element in contract negotiations. But she said that in cases where hospitals already had favorable contracts it might not have been an issue.
PacifiCare projects that 10% of its medium and large employer customers eventually will sign up for the plan.
Darmiento is a staff writer with the Los Angeles Business Journal
