AMCs React to Being Shut Out of Some Exchange Plans

Cheryl Clark, for HealthLeaders Media , December 13, 2013

Cedars-Sinai Hospital
At 958-bed Cedars-Sinai Hospital in Los Angeles, president and CEO Thomas M. Priselac has similar concerns because only one health plan, HealthNet, has plans that include contracts with Cedars-Sinai physicians.

Those who buy plans through Blue Cross, Blue Shield, Aetna, and Cigna will go elsewhere under in-network pricing because, he says, "though we talked with all of them… at the end of the day we were not able to reach agreement on a price that was sustainable."

Priselac says that the scenario the AAMC's Conroy suggests, where health plans were offering rates 30% lower than what they pay for non-exchange commercial plans for care at that hospital, "is not atypical" of what happened at Cedars-Sinai.

He emphasizes that health plans are not seeing the academic medical center in the right context. Rather than excluding Cedars-Sinai because of its high costs, Priselac says, health plans should understand that academic medical centers like his are community resources that "provide a significant volume of treatment for the most advanced care medicine can provide," with large research and teaching programs, "that location is more expensive, but the system overall saves money because it's cheaper to have those costly services in one area so you don't duplicate the people and the equipment."

Where insurance companies get it wrong, he says, is that they make judgments based on cost comparisons in a narrow geographic area.

In time, when the population within the exchanges becomes clearer and patients realize what they have bought, Conroy hopes "clearer heads will prevail. We all want the exchanges to work. We just have to figure out how. And we can't anticipate all the bumps in the road that we'll have to work through to get there."

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