One of California's largest health insurers is dropping two of the state's largest and most prestigious hospitals from a provider network for municipal employees, claiming their costs are too high, reported the Los Angeles Times.
The decision by Anthem Blue Cross of California to drop Cedars-Sinai and Ronald Reagan UCLA Medical Center from the narrow provider network offered to City of Los Angeles employees is expected to save $7.6 million a year for the municipality, the article reported.
Such a decision could foretell large, prestigious tertiary hospitals being excluded from provider networks because they cost too much, according to the newspaper.
"We want great teaching and medical research institutions to survive. Whether that should happen by charging everyone in society a higher rate for routine services is more debatable," David Lansky, CEO of the Pacific Business Group on Health, told the LA Times.
However, the Institute for Health Care Consumerism noted that the use of narrow networks also can result in cost shifting to consumers, who may be pressured to use out-of-network services because they have no choice or are unaware they are exiting the network.