California turns public employees and retirees into partial self-pay patients, sees prices drop

While most self-pay patients are either uninsured or have high-deductible health insurance plans, there are occasions where people with ‘comprehensive’ insurance wind up in either the same or a very similar situation as self-pay patients. I recently read about the experience of public employees and retirees in California that demonstrates some of the power that self-pay patients hold to keep health care costs down, and that I thought would be worth sharing with readers of The Self-Pay Patient.

Calif. Hospital Prices Drop as CalPERS Caps Coverage for New Knees, Hips

Joint replacement prices at the most costly California hospitals plunged by one-third after the state required its workers and retirees to pay out of pocket all costs above a “reference price” of $30,000 for orthopedic surgery, a new study said.

The average cost of joint replacement among high-priced hospitals dropped to $28,465 after the California Public Employees’ Retirement System made the change in 2011…

CalPERS and insurer Anthem designated 41 hospitals as those with “value”—those with joint replacements priced below $30,000, a high volume of procedures and quality measures reported to the Joint Commission and the state. Patients at “value” hospitals paid co-insurance up to $3,000. Patients who went elsewhere paid the co-insurance up to $3,000 and any additional cost beyond the $30,000 total price.

Value hospitals started getting a lot more of the joint replacement business. In 2010, “value” hospitals performed fewer than half (43%) of joint replacement procedures among the study population. That jumped to 63% in 2011. Hospitals not selected as “value” saw their percentage of joint replacement operations fall to 37% in 2011, from 52% before the benefit design switch…

Most self-pay patients would probably just call this common sense – when patients have to pay for their own care, they understandably are going to be more prudent with their dollars than if they simply have insurance to cover everything. Who knows, maybe one day the rest of America’s healthcare system will catch up with what self-pay patients have known and been practicing all along?

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One Response to California turns public employees and retirees into partial self-pay patients, sees prices drop

  1. Pingback: Medical inflation slows because of self-pay healthcare? | The Self-Pay Patient

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