Blue Cross Blue Shield of Massachusetts


Mapping The Ever-Shifting Mass. Hospital Landscape

Thanks to health policy guru John McDonough for highlighting the Blue Cross Blue Shield of Massachusetts’ new Health Care Delivery System Map which offers a snapshot of the state’s medical industrial complex as it becomes increasingly concentrated. There’s great data here, and it’s fairly easy to sort, from hospital revenue, ownership and geography to the latest info on mergers, acquisitions and new partnerships.

This online, interactive site won’t tell you where to get the best colonoscopy or most specialized cancer care, for instance, but it does offer insight into the scope and breadth of the marketplace. It essentially provides a baseline view of the state-of-the-industry for all the Mass. hospitals and hospital systems, medical groups, doctor networks and community health centers.

(Blue Cross Blue Shield Foundation of Massachusetts)

(Blue Cross Blue Shield Foundation of Massachusetts)

As McDonough writes:

For example, if you want to begin to understand why Partners Healthcare is so dominant in the state’s healthcare market, don’t go to this page, Hospital Systems by Size, on which Partners is #2 after Steward Health Care System. Go this this page: Physician Networks and Major Medical Groups, where the size of Partners’ physician network (called Partners Community Healthcare Inc., PCHI, or “peachy”) is larger than #2 (Steward) or #3 (Atrius), combined.

Or look at hospitals by Net Patient Service Revenue, and see that Partners total NPSR in 2010 ($4.2 billion) was the same as #s 2 (UMass Memorial), 3 (Steward), and 4 (Beth Israel Deaconess) combined.

Don’t forget this helpful page of Recent Changes in the Massachusetts health care market.

Readers, please roam around the site and let us know what’s interesting or useful to you.

It’s Time To Pay Up For Mass. Health Costs Law

By Martha Bebinger

Guess who has to write the state a check for the lion’s share of funding for the newish health costs law?  Almost half the money will come from Partners Healthcare and Blue Cross Blue Shield of Massachusetts (see the charts below).

A little background: The law that’s supposed to improve health care quality quality and control costs also imposes a hefty fee on some hospitals and insurers (as well as some other “payers”). The law says the surcharge will raise $225 million for distressed hospitals, a prevention fund, electronic medical records and the agency that will bring the law to life.

Now we have the first drafts of who will pay and how much.  Among hospitals, only the Partners system, Caregroup (bet you haven’t thought of this organization for a while) and Children’s meet the criteria for the fee (the criteria are spelled out in draft regs at the bottom of this page). Partners took a $42mil charge, in anticipation, last year. Caregroup and Children’s have told the state they may ask for a reduction, claiming they don’t fit the criteria.

  1. Partners Healthcare – $42 million
  2. Caregroup – $11m
  3. Children’s – $8m

Now the insurers. Here’s the full list of 96 payors and their proposed fees. The top five are:

  1. Blue Cross Blue Shield of MA – $65m
  2. Harvard Pilgrim Health Care – $21m
  3. United Healthcare – $9m
  4. BMC HealthNet Plan – $7m
  5.  Neighborhood Health Plan – $7m

By the way, the law says insurers can’t increase premiums to cover this surcharge. Continue reading

Mass. Hospitals Rate Local Health Plans, Knock Blue Cross Contract Talks

report card

(Wikimedia Commons)

This just in from the Massachusetts Hospital Association:

Massachusetts Hospitals Rate Performance of Health Plans

A performance satisfaction survey of the commonwealth’s 13 health insurers that the Massachusetts Hospital Association conducted has identified a variety of strengths and weaknesses among the health plans, with administrative burdens remaining frustratingly high across the board, but local- based insurers faring better overall than their national counterparts.

Some 30 hospital systems representing 35 Massachusetts hospitals shared their thoughts on the administrative performance of health plans in areas such as claims adjudication, communication capabilities, credentialing and re-credentialing processes, and conducting two-way, good-faith negotiations. This is the third insurer satisfaction survey that MHA has participated in or administered…

Some of the highlights of the survey include:

Overall satisfaction with the payers varied substantially by individual insurer. Harvard Pilgrim Healthcare (HPHC) received the highest marks. Problems that contributed to provider dissatisfaction with the insurers included plan rigidity even when resolving difficulties the plan itself created (Blue Cross Blue Shield of Massachusetts); glitches with the insurer’s billing system and long appeal lag time (Fallon Community Health Plan); and problems with insurers authorizing a visit, then stating at the time of payment that a member was not eligible (United Healthcare and Aetna).

HPHC, Tufts Health Plan (Tufts) and Fallon scored very well on their contract negotiation conduct with providers – more than 75% of the hospital respondents said those three insurers conducted two-way, good-faith negotiations with providers during contracting. But 73% of the survey respondents were dissatisfied with Blue Cross Blue Shield of Massachusetts’ contract negotiation, and 59% were dissatisfied with Neighborhood Health Plan on this measure. Continue reading

Dreyfus On Health Cost-Cutting Marathon: ‘We’re Barely To Framingham’

If you missed Andrew Dreyfus’ speech last week to the Greater Boston Chamber of Commerce you are forgiven: it wasn’t exactly Fifty Shades of Grey. To be fair though, the president and CEO of the state’s largest health insurer, Blue Cross Blue Shield of Massachusetts, did make some good points about how hard it is to cut health care costs and the historic divisions that make it even harder, among other topics.

To put the problem in perspective for a Boston crowd, Dreyfus (who reportedly is very attached to his pedometer and competes with his daughter to see who can accumulate the most steps daily) offered this health-related metaphor:

“…If health care reform is a marathon, I believe then we are already at about mile 22 – past Boston College – on coverage, and at mile 15 on quality – crossing Wellesley at Route 16, but with those steep Newton hills still ahead. But when it comes to cost, we’re barely to Framingham, with a long, challenging race ahead of us.”

Here, excerpted, are snapshots of his speech:

On The Path To Value

“First, we must hasten the redesign of our system for delivering care and paying for it. Second, we need to promote better health so we spend less time and money treating illness. Third, we must empower patients to play a central role in their care. And finally, we need to bridge some historic divides that subvert our affordability efforts again and again.

On Wellness Vs. Illness

“You’ve heard it before but it’s worth repeating: 50 percent of health care costs are associated with just five percent of patients, and 25% of costs with just 1% of patients. While these expensive patients include a small number of organ transplants, major traumas, and premature infants, the vast majority of spending is for people with multiple chronic illnesses, such as diabetes and coronary artery disease, or renal disease and depression. For these patients, staying healthy requires constant vigilance; they typically have multiple clinicians, multiple prescriptions, and are frequently hospitalized. By putting our focus on the health of the 5% of patients with multiple chronic conditions, we can help them lead healthier lives and reduce costs for all of us.

Some solutions are breathtakingly simple and low-tech, like ensuring patients have a PCP or nurse practitioner who coordinates their team of caregivers, deploying home health aides, social workers, and medical specialists as needed. Other solutions exploit new technology: telemedicine to monitor patients at home, medical records that connect hospitals and physicians offices, and social networks for patients to support one another. Continue reading

Children’s Hospital Signs On To Global Payment Strategy

Sandra Fenwick, President and COO, Children's Hospital Boston

Children’s Hospital Boston has a new three year deal with Blue Cross Blue Shield that holds rates flat this year.  In the second and third years, Blue Cross says the increases will be less than general inflation, which has been around 2%.

Children’s President and COO Sandra Fenwick says the savings, as compared to previous increases, will be $83 million.  That amount, Fenwick says is in addition to money Children’s shaved off contracts in 2009 and 2010 for a the total of $155 million.  Is that enough over five years? Weigh in below.

Beyond the savings, Fenwick says this contract is a milestone because it moves Children’s into the Blue Cross Blue Shield global payment plan (the Alternative Quality Contract/AQC).  “We’re going to be taking risk for managing the care of our patients,” says Fenwick, “we’re going to be held accountable for the quality, and it really is in line with policy changes that the whole country is going to be watching.”

Blue Cross CEO Andrew Dreyfus also calls this contract a milestone, but for a different reason.  Dreyfus recalls sitting in meetings several years ago about moving to global payments and hearing “a lot of skepticism about whether global payments could work in a specialty hospital like Children’s. I think we’re answering the question that it can work in a way that both improves quality and lowers cost.”

For more on how Fenwick sees the deal, here’s a condensed version of our interview: Continue reading

Mass. Briefs To Supreme Court: ‘Hey, Health Reform Works For Us’


Have you filed your Obamacare amicus brief yet? What? You haven’t? Then you’re way behind your fellow Americans — at least those in organizations with a dog in this fight. The Supreme Court is expected to consider Obamacare — better known as the Affordable Care Act or the federal health care overhaul — in March, and the deadline for some of the amicus briefs in support of the government was Friday. (“Amicus” = friend in Latin. Amicus brief: An argument from someone with a strong interest in the case, but who is not actually a party to the legal action.)

A few highlights on the Supreme Court’s “friends” in Massachusetts:

• Attorney General Martha Coakley filed her brief on Friday. From the press release:

BOSTON – Arguing that Massachusetts’ own experience supports the federal government’s basis for passing national health care reform, Attorney General Martha Coakley filed a brief today in the U.S. Supreme Court supporting the federal Patient Protection and Affordable Care Act (PPACA).

Massachusetts’ health care reform law served as a blueprint for the PPACA. In her brief, the Attorney General argues that the successful results from the Massachusetts law enacted in 2006, including a reduction of the number of uninsured people utilizing the “free-care” pool (so-called “free riders”), demonstrate that Congress had a rational and constitutional basis to enact an individual coverage requirement in PPACA. Continue reading

Tufts, Blue Cross, Giving Patients A Voice And Re-Imagining The Pie

Scene from another negotiation, US-Russian arms talks in Geneva

Yesterday, the news broke that contract talks have broken down between Blue Cross Blue Shield of Massachusetts and Tufts Medical Center, and if nothing changes, tens of thousands of patients may have to switch doctors or insurance plans next year. This seemed like the perfect moment to turn to Harvard’s Program for Health Care Negotiation and Conflict Resolution — and to Leonard Marcus, Barry Dorn and Eric McNulty, co-authors of the new edition of “Renegotiating Health Care: Resolving Conflict to Build Collaboration.”

Q: So how do you see this Blue Cross-Tufts situation?

Lenny: I see this as once again a partial negotiation where the insurance company and a provider are trying to figure out a business arrangement without including the full range of stakeholders — which would include the patients. Patients have an economic stake in health care just as insurers and providers do. So, it would be interesting to imagine, if the patients were at the table, what might they add to this negotiation?

Imagine if Blue Cross wound up paying less to Tufts than they do to Partners and they took that savings, passed it along to patients, and said, ‘If you are on a tight budget and want a lower-cost plan, we have it for you — if you go to Tufts providers. If you prefer to go to Partners providers, you pay more. Blue Cross would achieve cost savings it wants, Partners would get the premium price it wants, and Tufts would get some competitive advantage through a lower-priced offering. The economics would be transparent and consumers could exercise choice. If many of them chose the lower-cost Tufts option, it could cause Partners to rethink its model – and possibly result in reductions of overall system costs.

“‘Us against them’ battling over a fixed pie where each side is trying to get the biggest piece of the pie”

But under the current rubrick, patients pay the same for Blue Cross Blue Shield coverage no matter where they go. So, one could assume that whatever money Blue Cross is extracting from this will go straight to their bottom line.

So if you were advising Blue Cross and Tufts right now about how to get their negotiations back on track, what would you say? Continue reading

Brain Surgery Patient To Tufts, Blue Cross: ‘Guys…Work It Out’

Here, Martha Bebinger tracks down a brain surgery patient (who happens to be an anchor at WBUR) to illustrate what’s at stake after contract talks between Tufts Medical Center and Blue Cross Blue Shield of Massachusetts broke down last night.

Due to the impasse, Blue Cross members who see doctors at Tufts Medical Center may have to find a new physician in January. The state’s largest insurer sent letters today warning patients about what this might mean for them.

To get a first hand view on the Tufts, Blue Cross dispute, Martha walked into one of our glass walled studios where a colleague had just finished a newscast:

Mr Faneuf?

Dave Faneuf, an anchor at WBUR, is a Blue Cross member who had surgery this summer to remove a brain tumor. Now he’s receiving radiation.

“If this reoccurs, if it comes back, radiation will not be an option again,” Faneuf said. “So the only option is more surgery. And the team that performed the surgery is at Tufts. They’re the one’s who’ve been in there, they’re the ones who’ve written the notes, they’re the ones, if I have to go back, they’re the ones I want doing it.” Continue reading

Partners CEO: A ‘Sentinel Moment’ In Health Reform?

Partners CEO Dr. Gary Gottlieb

(For related news stories, see WBUR here — Blue Cross, Partners Finalize Deal To Slow Premium Hikes — and the Boston Globe here.)

If I were writing the rough draft of current Massachusetts health reform history, this would be my intro:

On Oct. 5, 2011, it became clearer than ever that Massachusetts would indeed march forward toward payment reform, moving away from traditional “fee for service” and toward giving doctors annual budgets for a patient’s overall care.

Whatever now happened in the political arena, the reality on the ground was already shifting dramatically. On Oct. 5, Partners HealthCare — the state’s largest hospital system and largest employer overall — officially announced that it would enter a global payment plan offered by Blue Cross. The behemoth of Massachusetts medicine was throwing its tremendous weight and resources behind the move toward global payments. What had been a growing scatter of promising experiments was now going ever more mainstream.

Rough drafts of history aside, and though only about 200,000 patients will be initially affected, I do have the feeling that this is a significant moment in health reform, locally and perhaps nationally, too. How did this come to be? I asked Partners CEO Dr. Gary Gottlieb. His reply, slightly condensed:

There are two elements. One is that, as we’ve told you, we’ve been working on our strategy since I started, and that has focused on both care redesign and population management. And an essential part of population management is managing high-risk populations.

We believe that in order for health care to be redesigned in a way that is patient- and family-centered, we need to move away from transactional fee for service, and sharing risk with a payer provides the opportunity to use resources more effectively.

‘Do I think Partners’ moving into this is a sentinel moment?’

It has the potential to be able to focus on individual patient needs and to design care in a way that moves away from transactional and disorganized care. And the AQC [The Blue Cross global payment plan] is the first opportunity in that regard.

We need payment mechanisms that are consistent with the appropriate redesign of patient and family-centered, efficient care. Whether it’s patient-centered ‘medical homes,’ in which we’ll manage a substantial amount of population risk — or bundled payments, in which there will be episode payments where we can share the risk with specialists…The more flexibility we have in the way we’re paid, the more we’ll be able to achieve these goals.

So, I asked, would it be correct to say that as you looked at how to contain costs, you came to the inescapable conclusion that the modes of payment had to change in order to cut costs? Continue reading

More Scrutiny Of Accountable Care Organizations

Deep scrutiny and analysis of so-called Accountable Care Organizations, or ACO’s, continues with a new report in the current issue of Health Affairs.    It looks at how medical groups are responding to Blue Cross Blue Shield of Massachusetts’ version of this latest iteration of care delivery, which hinges on global payments and financial incentives for doctors to keep their patients healthy.

The report, by researchers led by Robert Mechanic, a senior fellow at the Heller School of Social Policy and Management at Brandeis University, focuses on the medical groups that are signed on to Blue Cross’s Alternative Quality Contracts. The findings underscore that changes are indeed underway.

For instance, the study finds that medical groups have introduced new information systems and processes to help primary care doctors improve their performance quality scores, and they’re implementing new referral services to steer patients toward lower-cost care when appropriate.

But the report also highlights some challenges, including one which seems pretty darned significant: When you keep people healthy and out of the hospital, you save money. However, you also cut in to hospital profits. Here’s how they put it in the report: Continue reading