Boston Globe Gets It Right About Tiered Health Plans

On the front page of today’s Boston Globe, is an article on the new tiered health care plans being pushed on consumers.  Finally!  Since the day, I first found out about these plans I have been writing about the cost  and burden to the consumer.

With these plans, providers and hospitals are rated by their negotiated rates with the insurance companies.  Specialty centers, like Dana Farber and Mass General are given a higher rating.  This translates to the consumer as a higher out of pocket cost to use any of these doctors or hospitals.  For instance, if you wanted to see a specialist at Dana Farber for a cancer, the out of pocket cost, most likely, would be three to four times higher.

The insurance companies have negotiated lower rates with local and smaller hospitals.  It has nothing to do with expertise, safety or quality of care.  Let’s call the local hospitals the generic providers.  The brand name providers are the specialty hospitals.  Just like medication tiered plans, the cost to the consumer is highest even if the medication or treatment is medically necessary.

The insurance companies have been marketing these plans as a way for consumers to be involved in the cost and decision making of their health care.  In some instances, it may be more cost effective to go to a closer lab or urgent care.  However, if there is a life threatening illness, and the generic hospital does not have the specialist or the wait time for a surgery is long, then the cost burden falls on the consumer.  There is no prior approval for the generic rate.  Either a generic is used or you pay out of pocket.

I am not suggesting that local hospitals or providers are not competent or even sometimes better.  I  often recommend the radiation oncologist at the local hospital because the wait time is less and the care is very personal.  It is also a satellite of a major speciality center but considered a local provider.  My point is that options to the consumer are being limited.  It is even narrower than the old HMO plans because most specialty centers were in the network.

These plans need to go away.   Most people have no idea how these plans work.  Or is it a way for the insurance companies to bring the specialty center to their knees and negotiate lower rates?  Whatever the reasoning, it has to be stopped.