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To Cut Costs, Local Organization Forms Own HMO

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Aired 8/31/10

Businesses across the board are facing steep increases in health insurance costs. One local group that represents 80,000 school employees has found a way to save money by forming their own HMO.

Businesses across the board are facing steep increases in health insurance costs. One local group that represents 80,000 school employees has found a way to save money...by forming their own HMO.

The Voluntary Employee Benefits Association, or VEBA, worked with an insurer to create a three-tier HMO.

The plan sorts medical groups in San Diego into three networks based on how well they meet quality and cost standards. Members pay less if they a choose a network with groups that have high ratings in both categories.

"The new performance HMO is about giving our members the information they need about cost and quality so they can shop for their health care insurance, just as carefully as they would any of their other purchases, like their cell phone or their car," said Laura Josh, VEBA's marketing manager.

Josh said the new HMO will help VEBA avoid an 11 percent increase in health insurance costs.

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