Half of public employers and about one-third of private companies now offer plans that limit their workers’ access to expensive hospitals and doctors, but many are confused about how these plans work, according to a survey and focus groups commissioned by Boston Children’s Hospital.
Children’s, which has been tagged by insurers as one of the most expensive hospitals, has long been concerned about the impact of “limited’’ and “tiered’’ networks on its business and patients.
A limited network restricts employees from getting medical care from the most expensive providers, usually in exchange for lower premiums. Tiered networks rank hospitals and doctors based on cost and sometimes quality; consumers are charged higher co-payments if they choose a more expensive provider.
Children’s Hospital, which has been placed in the high-cost tier in some of these networks and closed out of others, argues that it is not always fair because insurers don’t have good ways to measure the quality of pediatric hospitals. The hospital also argues that its costs should not be compared with those at adult hospitals because children are more expensive to care for.
Access is part of the equation as well, Sandi Fenwick, Children’s president and chief operating officer, said in an interview Wednesday.
“Can the patient get to where they need to go for definitive treatment when they need it? The place with greater experience and volume,’’ she said. “These products could push people to places where they could end up spending more money” on tests and doctor visits that could have been avoided if patients went to Children’s in the first place.
Fenwick said Children’s hired MassINC to survey 225 Massachusetts-based employers and Plan-It Marketing to conduct focus groups so it could understand what type of information employers are using to make coverage decisions. You can read the report on Children’s website here.
“There is a tremendous amount of confusion,’’ Fenwick said. “People don’t understand how to evaluate (these plans) and what to buy and what they are buying when they buy it.’’
The survey also found that premium cost and employee out-of-pocket costs are the top two factors in choosing a health plan, but that the quality of a health plan’s network of physicians and hospitals follows closely. Nearly 45 percent of employers are relying on plans with high deductibles and co-insurance to lower costs.
Children’s has been moving aggressively to cut health care costs by reducing its fees to private insurers. Fenwick said Wednesday that the hospital also is negotiating to participate in limited and tiered products.
For example, Harvard Pilgrim Health Care this year formed what it calls a “focused network” that excludes high-priced providers. Fenwick said Children’s suburban satellite locations were able to recently join the network even though the main hospital in the Longwood Medical Area was deemed too pricey.