Covered California targets removal of poor-performing hospitals, draws ire from providers, insurers
- Earlier this month, Covered California, the state's health insurance exchange, released a draft proposal for its network management and delivery systems standards.
- California Healthline's Chad Terhune notes the organization is threatening to let poor performing hospitals go from the system.
- The initiative is not being well received by providers nor insurers.
Covered California Executive Director Peter Lee stated the organization's goal is to decrease costs and increase quality of care.
"We are now shifting our attention to changing the underlying delivery system to make it more cost effective and higher quality. We don’t want to throw anyone out, but we don’t want to pay for bad quality care either,” Lee was quoted by Terhune.
"If approved, insurers would need to identify hospital 'outliers' on cost and quality starting in 2018. Medical groups and doctors would be rated after that," Terhune wrote. Plans would be expected to get rid of poor performers by 2019.
The idea is genuinely novel. And with a novel idea in the healthcare space, you can imagine hemming alongside hawing. Not surprisingly, insurers and providers are not very excited about this proposal.
Insurers aren't necessarily excited to potentially disclose provider negotiated rates while providers themselves are raising a red flag of Covered California overreaching its authority and not providing clear measures on which they will be judged. For example, the California Hospital Association stated that Covered California is "acting too much like a regulator."
Lee noted he has taken his proposal to the desks of other marketplaces and employer groups in hopes to gain traction for similar efforts to increase pressure on providers and insurers.
“It’s the right goal but the wrong approach,” Charles Bacchi, California Association of Health Plans' chief executive, told Terhune, adding, “Covered California is proposing a top-down, arbitrary measurement system that carries a big stick. This can make it difficult for health plans and providers to work together constructively.”
The proposal will be voted on in April.
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