California exchange excludes priciest hospitals

Participants in California's health insurance exchange seemed to make a unilateral decision to help keep prices low: Exclude some of the state's most prestigious--and costliest--hospitals, the Los Angeles Times reported.

According to the Times, landmark L.A. providers, such as Cedars-Sinai Medical Center, are not included in the networks of any of the 13 health plans participating in the Covered California exchange. Only one plan offers UCLA Medical Center.

And some insurer participants, including Blue Shield of California, excluded nearly two-thirds of their traditional provider network in order to hold down costs and premiums, the article notes.

Cedars-Sinai is one of the most expensive hospitals in California, based on chargemaster data recently released by the Centers for Medicare & Medicaid Services.

The hospital charges more than $87,000 to treat a case of simple pneumonia, compared to the $67,000 charged by Los Angeles County-USC Medical Center. Cedars also charges nearly $95,000 to treat an intracranial hemorrhage, versus $81,605 at County-USC.

According to an earlier Times report, Cedar-Sinai's prices are among the top 5 percent in the nation.

It remains to be seen whether exchanges in others states will move to exclude hospitals in order to hold down costs. Only eight of 50 states have released premiums so far. In Oregon, some insurers dropped rates not because they cut out hospitals from their networks but because their premiums were out of line with competitors. 

"If we want to keep costs down, something has to give," Betsy Imholz, special projects director for Consumers Union, told the UPI wire service. "At first blush, it seems like Covered California has negotiated some good deals, but in any given community we will see how this network issue plays out."

To learn more:
- read the LA Times article on Covered California
- check out the Times article on Cedars-Sinai
- here's the UPI article