Massachusetts Group Health Insurance - News, Developments and Commentary

In this page we'll occasionally post, by date with most recent postings at the top, items about developments in health care. This is a dynamic time in health care evolution -- the health insurance landscape will surely be different than today five years or even a year from now, perhaps over an even shorter time frame -- you need help keeping up.

We plan to discuss news items -- changes in the Mass Health Law, new employer requirements, anything that affects the cost of the plan you offer your employees.

We'll also cover new carrier innovations. Blue Cross Blue Shield, Harvard Pilgrim, Tufts, Fallon, Neighborhood Health Plans are all working to find ways to help you keep costs under control, and as they introduce new concepts or plan tweaks, we'll let you know.

What's more, we'll also discuss ideas about how you can use your money more effectively. Alternative plan ideas, ways to combine private services (some of which BBI offers at ZERO COST to its clients) with carrier plans to achieve efficiencies. Different ways to allocate your employees' cost so as to make the system more fair for all... each of these will appear as they become timely or important.

February 27, 2009: Cobra Subsidy

February 3, 2009: Tufts Medical Center And Blue Cross Duke It Out Over Medical Costs

WHAT'S IT MEAN FOR YOU?

Details are below, but this all stems from the BCBS-Partners battle a couple of years back (see last issue). That battle has emboldened Tufts Medical to go for BCBS’s throat.

If they (Tufts Medical) win, they’ll come after Harvard Pilgrim and even their namesake, Tufts Health Plan.

Result? Your premiums will go up. And up.

TODAY'S SITUATION

Here’s where we stand right now: Tufts Medical Center (Boston), Pratt Medical Group (Boston) and Woburn Pediatrics (Woburn and North Andover) will no longer accept BCBS effective 2/1. Employees will have to get new doctors, and BCBS will make the new selection immediate (instead of waiting until the end of the month, as they usually do).

HOWEVER... please note that it's not the entire Tufts Medical organization -- it's just these three large practices. The rest of the Tufts Medical Center hospital and other Tufts-affiliated docs will continue to accept BCBS.

Any employee who is affected by this termination will receive a notice from BOTH Tufts Medical and BCBS. So I'd not say anything in a general way -- I'd wait for employees to approach you. Blue Cross has told us that ONLY two of our clients (those two don't include you) have 5 or more employees affected by the change. So perhaps none of your employees is directly affected.

THE BASIC STORY

As to what's happening and what the outcome will be, here's the scoop.

It's a somewhat long story, but the short version is that Ellen Zane, CEO of Tufts Medical, used to work for Partners in the financial department. So she knew the reimbursements that Partners was getting for various procedures. When she arrived at Tufts, she looked at the Tufts reimbursements and apparently thought, "Hey, we're getting shafted."

So she decided to try to increase the reimbursements they got, and she picked one set of PCPs (three large PCP practices with 91 PCP docs and 335 specialists) that had contracts renewing and decided to see how far she could push BCBS.

At the same time BCBS was offering a new contract that was trying to push medical reimbursements in a new direction. In the new BCBS model, Blue Cross was willing to pay MORE for various services providing that Tufts met certain quality outcome guidelines. But if the quality outcomes didn't meet the criteria, they (Tufts) would earn less than they wanted.

Tufts didn't want to talk about those options, claimed that they had very high quality already and effectively told Blue Cross to put up or shut up. Blue Cross wouldn't give them exactly what they wanted, so last week Tufts walked out of the negotiations. Blue Cross remains willing to negotiate.

WHERE THE TROUBLE BEGAN

The original problem began years ago when BCBS caved to Partners. Now Partners is overpaid, relative to the value they bring, particularly to more routine procedures.

Beyond that, I think Ms. Zane overplayed her hand. I think she figured that by going public she would embarrass BCBS into yielding. But look at it from the position of Blue Cross:

1. The Globe story that I covered in my last newsletter pointed out that some years ago Partners had "put the screws" to BCBS, demanded payment MUCH higher than the rest of the healthcare world.
2. Also in the Globe story, it was clear that in the Partners negotiation, Blue Cross caved. So Tufts Medical thought BCBS could be had.
3. So now BCBS is caught in the middle of a public pressure game.
4. BCBS must ask themselves, "Geeze, what happens if we cave AGAIN?" Answer: Every provider from Attleboro to Cape Ann, from Boston to Pittsfield will be banging on their door, threatening to break off relations unless BCBS gives them better prices. Can you really pass on one and not on another? Where do you draw the line as to who is worthy to get the higher rates and who isn't?

Bottom line? Tufts has backed BCBS into a corner from which they CAN'T get out. So BCBS looks at the situation and see the following:

• BCBS controls 45-50% of the market in Massachusetts.
• The BCBS network consists of 6,000 PCPs.
• The Tufts network that's pressuring them is 91 PCPs.

What would you do?

Easy decision (not pleasant, but easy) -- walk away from Tufts.

Tufts needs BCBS more than BCBS needs Tufts.

BLESSING IN DISGUISE FOR BCBS?

This may be a GOOD thing for BCBS. By willingly walking away from Tufts Medical, it sends a message to the likes of Mount Auburn, Caritas Christi, Lawrence General and all the other hospitals in Mass -- "If Tufts can't bully BCBS, what chance is there that we could?" That message REDUCES the pressure BCBS can expect to get from other providers.

Heck, it might even give them ammunition or an opening to go back at Partners and push some quality measures onto them.

WHAT DO I EXPECT FOR AN OUTCOME?

Here's what I think will happen. Quietly, VERY quietly, this will be solved at the 11th hour. Tufts will accept some measure of quality outcomes; Blue Cross will give them some incentives. Tufts can't afford to lose Blue Cross; Blue Cross doesn't want to lose a big player like Tufts. Problem goes quietly away.

AND WHO'S RIGHT?

As much as we all love doctors and hate insurance company executives, Blue Cross is on the side of the angels in this case, in my opinion.

Medical care is one of the few areas where people screw up and still get paid. Only one-third of docs, by one estimate, regularly utilize best practices. 200,000 people die every year from needless medical errors by another estimate.

Blue Cross (and Harvard and, to a lesser degree, Tufts) are trying to control that. They're trying to make hospitals and doctors perform at the top of their games if they want to get top dollar.

And isn't that the way the system is SUPPOSED to work? Don't we have the right to assume that our healthcare providers will give us the BEST treatment, not just part of the time but ALL of the time?

Maybe I'm wrong, but I think the public will be better served by the Blue Cross approach than by the Tufts approach, which seems to be, "Pay us more, even though we really don't plan to change anything."

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