Tuesday, January 06, 2009

With All the Blue Cross Shenanigans

This had to be inevitable.
Tufts Medical Center has begun warning thousands of patients that Tufts doctors will no longer accept Blue Cross Blue Shield HMO coverage after Jan. 31, asserting in a letter that the state's largest health insurer refuses to pay Tufts doctors at a "reasonable rate." ....

But Tufts officials said they had no choice but to begin phasing out Blue Cross coverage after 11 months of what Tufts described as fruitless negotiations with the company. Ellen Zane, Tufts Medical Center's chief executive, said that Blue Cross pays her doctors and hospital 20 to 40 percent less than other major teaching hospitals even though she said Blue Cross ranks Tufts among the top three teaching hospitals in Massachusetts for overall quality. Unless Blue Cross offers Tufts a major payment increase before the end of the month, the Blue Cross HMO contract with Tufts doctors will end on Feb. 1.

"We hope that Blue Cross comes to their senses," said Zane, adding that her hospital has lost $25 million treating Blue Cross patients over the past five years and is on a course to lose $10 million more this year. "The place has been grossly underfunded."
Call it 'karma.' Blue Cross Blue Shield has been screwing with the entire Massachusetts health care industry, acting like its supreme freaking overlord. Tufts was in a great position to publicly challenge Blue Cross; the public spanking they're giving the HMO giant is well appreciated. I have no idea if Tufts could be described as the 'good guys' either, but it's nice to see Blue Cross get what's coming to them, for once.

On the policy (and not schadenfreude) side: It's time for the state to end the practice of Blue Cross tampering with how what and which hospitals and groups are paid. The state ought to enforce rates, based on performance and actual cost, to rein in the industry in Massachusetts. The only difference between what Blue Cross pays Tufts or Partners or Beverly Hospital should be based on performance, not Blue Cross's whims. And I'm not the only one who thinks it:
But Stuart Altman, a healthcare economist at Brandeis University and a member of the Tufts board of trustees, said the dispute reflects the failure of the free market to assure high quality, affordable healthcare. He said all hospitals should be paid the same rate, adjusted for the quality of their work and the complexity of their patients' care. Instead, pay is largely determined by negotiating power.
The implications here are wide. The public wants results. There's never been a better time for the Commonwealth to step in. If there's one way for the Massachusetts to affect the rapidly rising costs of health care for the better, this is the way to do it. Tufts, which serves a disproportionate amount of low income patients, provides a great quality of care (saved my brother's life 15 years ago, when he was 18 and needed a heart valve transplant, a surgery back then which was exceptionally new at the time and which the folks at Tufts more or less pioneered). It deserves to be compensated based on its performance, not on the actual size of its hospital versus the size or prestige of hospital groups like Partners.


Anonymous said...

Is anyone addressing the salaries of upper execs? So much for 'non-profit'!
While this doesn't pertain to hospital reimbursement,
I have yet to figure out why Blue Cross Medex, that is the Medicare coverage that ONLY covers the 20% that Medicare doesn't is so expensive.
There seem to be too many issues surrounding insurance that are not being discussed and this is just one of them.

Ryan said...

I completely agree. If an entity is going to exist as a nonprofit, it shouldn't have execs making millions upon millions a year - or work towards cornering markets, as Partners has and continues to do.

That's not to say people who work and manage nonprofits don't deserve excellent, even 6-figure paychecks, but at some point we need to legislate checks against 'nonprofits' that really are 'for profits,' just minus shareholders and with some additional legal documents.

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