Tulane health insurance plan revamped

December 1, 1997

Judith Zwolak

'Tis the season of open enrollment for health insurance plans at Tulane. Until Dec. 19, employees can choose between the United Healthcare health maintenance organization (HMO) plan and a recently redesigned version of the university's self-funded Tulane Preferred Health Plan.

The Tulane plan, which will be implemented on Jan. 1, institutes a new three-tiered system of benefit coverage.

In brief, the first tier is similar to an HMO plan and requires members to select a primary care physician who coordinates all medical care. There are no deductible expenses, services are covered at 100 percent and members pay $5 for each doctor's visit.

The second tier has a larger network of physicians and hospitals, with a deductible of $300 for the individual and $600 for a family. The plan pays for 70 percent of covered services in this tier after the deductible is met.

In the third tier, members may seek medical care from any non-network physician and pay 50 percent of the charges. The deductible is $500 for an individual and $1,000 for a family.

"This is not only a complete redesign of the existing Tulane Preferred plan," says Steven Wallin, executive director of the Tulane Medical Group, the organization through which Tulane medical center faculty members practice medicine in the hospital. "It is a refocus on the need to manage the cost as well as the quality of that plan."

The university began reorganizing the plan last year to contain rising costs and offset a steady decline in membership over the past few years, Wallin says. The former plan also had a three-tier system but didn't require choosing a primary-care physician or strict preauthorization of office visits and procedures. Also, the deductible ($300 individual, $600 family) applied to all tiers.

"The benefits in the old plan were lacking," he says, "and the plan did not cover, from a broad-based perspective, an attractive geographical area for employees. The people left in the plan were the people who wanted choice. And a lot of people who want choice also happen to be the sickest people, which makes the costs go up."

With the guidance of the University Senate's Faculty and Staff Benefits Committee, Wallin and Blackwell Evans, associate professor of medicine and medical director of the plan, hammered out a new plan that Wallin calls a "win-win-win situation for everybody."

"The employees win because they get better benefits, flexibility in terms of choosing a provider and lower cost," he says. "The university benefits because we reduce its cost and preserve its self-funded plan. The physicians are also winners because we've built them a network where patients are incentivized to come to them."

Helping to build the plan as the medical director was "a trial and a delight," says Evans. Sacrifices on the part of Tulane hospital and clinic doctors made the deal possible, he says.

"The doctors and the hospital are taking very significant cuts in reimbursement as part of the plan as well as having opened up the network to include far more hospitals and doctors in the area, which will further dilute the medical center's direct participation," Evans says. "Nevertheless, we feel that this is essential to the well-being of the university and the medical center."

The provider network for tiers one and two is still expanding, Wallin says. Including doctors at Tulane clinics, tier one has approximately 100 primary-care physicians at locations throughout the metropolitan area, which also covers the Northshore and West Bank.

Hospitals other than Tulane added to the first tier are Meadowcrest Hospital, Touro Infirmary, Kenner Regional Medical Center, St. Tammany Regional Medical Center, Lakeview Regional Medical Center, Lakeland Medical Center, Lakeside Hospital and Slidell Memorial Hospital.

Under tier one, the new plan also covers wellness activities, such as mammograms and immunizationsitems not previously covered .

"We're still building out," Evans says. "We're still adding doctors. And, of course, the whole Tulane Faculty Practice Plan is in tier one."

In tier two, participating hospitals are Memorial Medical Center--Uptown and Mid-City campuses, Doctors Hospital of Jefferson, Northshore Regional Medical Center, Northshore Psychiatric Hospital and St. Charles General Hospital. Members of the plan who want their physicians to be included in tier two can submit their names to Tulane plan administrators. If they pass credentials and are willing to participate, Tulane will add them to this tier, Wallin says.

The third tier covers all non-network providers. "There is a price for this choice," Wallin says, "but there is flexibility."

A new aspect of the plan requiring authorization for visits to a physician other than the primary-care physician in tier one and for certain procedures and hospital services in tiers two and three may be unfamiliar to members of the previous Tulane plan.

Administrators will use the "Call First!" medical review program, which has existed for more than a year, more rigorously in the new plan than in the previous plan. Evans is in charge of this program.

"We have a significant staff of people who will maintain a database to establish eligibility, track all authorizations, procedures and admissions, and insure that providers meet the criteria for quality and training that are appropriate for their services," he says.

Wallin adds this new database can help the plan improve care to members as well. "If we want to run a special on screening mammograms," he offers as an example, "we have a system where we can contact all women who are of the ages where national statistics show they should have at least a baseline mammogram. We're now elevating the quality of care as well as managing the population."

Wallin and Evans say the plan will continue to evolve over the next year. "I think that it will take about a year for the size of our network to equal, and the amount of choice in our network to exceed, what United [Healthcare HMO] has," Evans says.

One immediate advantage the Tulane plan has over the HMO is its out-of-town coverage, he adds. A child in college in another state, for example, can have both his emergency care covered at 100 percent and his routine care covered at the 50-percent level on tier three. An HMO would cover only emergency care. Another change to both plans is a reduction in premiums for dependents.

Previously, the charge was approximately $223 per month. In January, the monthly charge for this coverage will be $186 for the Tulane plan and $187.65 for the HMO. The plan will experience growing pains, Evans concedes, but the results should be a better system for everyone.

"In an HMO-type plan, it's been shown many times in studies that there is no decline in the quality of care that's delivered, but the cost overall will be less," he says. "The trade-off is more administrative work and a greater hassle factor for some people who are involved, especially doctors and hospitals. These are unfortunate facts of life in a time when the increases in healthcare costs have become unsustainable."

Personnel services will hold open enrollment informational meetings about both the Tulane plan and United Healthcare on the uptown and downtown campuses and the primate center early this month. See the calendar for details. For questions about Tulane Preferred Health Plan specifics, call the Tulane Medical Group at 584-1801.

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