tufts health plan


Subsidizing The Salad Bar

I spent $8.10 on a skimpy “make your own” salad at my employer’s cafe today.

If I had made the same salad in the Tufts Health Plan cafeteria it would have been at least 25% cheaper. Tufts “subsidizes” the fruit and salad bar prices for employees. Hello, are other employers listening?

Tufts isn’t out to compete with other employers. It’s trying to encourage employees to buy salad instead of pizza. In short, to eat healthy. (Warning: Bacon bits don’t count as healthy.)

Tufts says the subsidies are working. The cafeteria sold 661 pounds of salad each week in May 2010. Last week, those Tufts employees ate 915 pounds of salad. But pizza consumption is not down. Hmmm…Are more Tufts employees eating out or are Tufts employees just eating more?

I’ve been thinking about these salad subsidies as I read about renewing the farm bill. Yes, Congress is talking about moving from subsidies to insurance against losses for corn, wheat and other crops that critics say contribute to obesity, but price supports for sugar are still in. And subsidizing salad? Nope – not there – not yet.

Earnings Up For Large Mass. Health Plans

Blue Cross Blue Shield Chief Andrew Dreyfus

WBUR’s Martha Bebinger reports:

Earnings are up for all four of the state’s largest health insurance companies.

The largest — Blue Cross Blue Shield of Massachusetts — reports income for the first time in three years.

After losing money in 2009 and 2010, Blue Cross president Andrew Dreyfus says operating income for last year totaled $43 million. “I think it reflects the fact the company is healthy and doing well,” he says, “although the operating margin is very narrow.”

Tufts Health Plan, Fallon Community Health Plan, and Harvard Pilgrim Health Care are also reporting significant earnings increases.

The Boston Globe’s Rob Weisman reports on the latest health plan financials here, including a pointed comment from a consumer advocate about continually rising premiums.

“Premiums are still increasing, and they’re already too high,’’ said Deirdre Cummings, legislative director for the Massachusetts Public Interest Research Group. “This is the same dance insurers have been doing for some time, and this is what consumers are frustrated by. Insurers are reaping the benefits that should be going to consumers.’’

Paul Levy ‘Does The Math,’ Says New Partners Contracts Increase Disparity

Paul Levy of "Not Running A Hospital"

WBUR’s Martha Bebinger had a couple of follow-up questions for Paul Levy, former chief of Beth Israel Deaconess Medical Center and still a widely read blogger who, among a great many other topics, regularly takes Partners HealthCare to task for its high prices.

One of his latest posts discusses Partners’ recent renegotiation of its contracts with Blue Cross and Tufts Health Plan, touted in press releases as saving tens of millions of dollars. He writes that the new contracts will only increase the disparity between Partners’ prices and everyone else’s, and he calculates that over the last decade, Partners has added roughly $2 billion to health care costs paid by Massachusetts businesses and individuals.

Martha asked via email:

1)Why would the disparity between Partners HealthCare System rates and other providers increase under this contract?

2)How do you get the $2 billion figure?

And Paul Levy replied:

Simple math, Martha. Everyone else is getting rate increases of, at most, the same 2-3 percent. Many are getting below that. Since the base for the others was lower than PHS, the spread between the PHS rates and theirs has to be growing. Continue reading

Behind The News That Partners And Tufts ‘Ripped Up’ Their Old Contract

WBUR's Martha Bebinger

In case you missed it, WBUR’s Martha Bebinger spoke with host Bob Oakes this morning about yesterday’s news that Partners HealthCare, the state’s largest hospital system, and Tufts Health Plan have ripped up their old contract and signed a new one aimed at saving a total of more than $100 million dollars. Their talk:

Bob: We bring you a health care story this morning with many layers. It begins with this headline: Partners HealthCare is volunteering to take less in a new contract with Tufts Health Plan. But beneath that headline is a world of spinning changes that will affect hundreds of thousands of jobs and billions of dollars of spending in Massachusetts. Joining us to discuss the dynamics is WBUR’s Martha Bebinger. Let’s start with: What happened in this contract?

Martha: For more than a year now, Governor Patrick has been calling on hospitals to reopen contracts and take less money. Partners, with some of the highest paid hospitals, did, first with Blue Cross last October and yesterday with Tufts Health Plan. In the Tufts case, Partners had two years left on a contract that was scheduled to increase 6-7 % every year and Partners agreed to take 2-3% instead. Here’s Partners CEO Gary Gottlieb:

“It’s a pretty big deal to look at that contract and say look, I want to rip that up and I want to take less money, that’s a big deal. What it says is that we’ve got a market that is dynamic and that that market is working.”

Partners also agreed to move all Tufts HMO patients into a global payment contract where doctors have to manage a budget for their patient’s care. Continue reading

Tufts Health Plan And Partners Renegotiate, Estimate $105M In Savings

Partners: Rethinking care delivery to control costs

WBUR’s Martha Bebinger reports:

The state’s largest hospital network, Partners Health Care, has signed a second contract that trims health care spending. A deal out today with Tufts Health Plan is expected to reduce payments over four years by $105 million dollars: Partners opened an existing contract with Tufts to re-negotiated a lower payment rate.

For Tufts members that means roughly 1% off premium increase they might otherwise see.

Partners CEO Gary Gotlieb says Partners doctors and hospitals realize that rising health care costs are a burden on families, businesses and the government.

“We have to be responsible in looking at that and therefore, we’ll rip up those contracts and look for ways that we can take increases that are smaller over this period of time,” Gottlieb said.

Last year, Partners, which owns Massachusetts General and Brigham and Women’s hospital, agreed to a contract with Blue Cross Blue Shield of Massachusetts, the state’s largest insurer, that will save $240 million. Partners says it is doing its part to relieve the pressure of rising health care costs.

Tufts Health Plan CEO Jim Roosevelt says Partners will also move to a so-called global payment system based on keeping people healthy, not just how many services doctors provide. Continue reading

MA Health Insurance: Putting Off The Premium Pain?

Don’t miss this excellent report on Massachusetts premium hikes this morning by WBUR’s Martha Bebinger, coming on the heels of yesterday’s daunting national figures from the Kaiser Family Foundation:

WBUR's Martha Bebinger

BOSTON — You would think word that health care premiums won’t go up as much next year would be a reason to celebrate. Health insurers are certainly relieved to have some moderately good news.

“The average rate of premium increases that our customers will experience will be the lowest level since 2005,” said Blue Cross Blue Shield Vice President Jay McQuaide.

Blue Cross is telling medium to large firms their premiums will increase 4 to 6 percent. At Tufts Health Plan the range is a five to 8 percent rise and at Harvard Pilgrim Health Care it’s a 5 to 10 percent increase. Keep in mind that employers will have higher and lower increases depending on the type of plan they buy and how much care employees used in the recent past.

These rates are down a few points from last year, but they are still climbing much faster than the expected inflation rate of 1.6 percent in Massachusetts.

“Premiums are still increasing at a rate that is neither acceptable nor sustainable,” said McQuaide, “and we know here at Blue Cross that we’ve got more work to do to make health care affordable.”

You’ll hear that “more work to do” message from Harvard Pilgrim and Tufts as well. The plans are under increasing pressure from employers, consumers and the state to reduce premiums.

Martha reports on the debate on whether the state should regulate insurance rates more, including this vivid quote:

“Those rates are nothing less than big neon lights flashing legislative solution, legislative solution, legislative solution and we can’t ignore it anymore,” said the Rev. Hurmon Hamilton, with the Greater Boston Interfaith Organization (GBIO). GBIO and Health Care for All had called on insurers to freeze premiums for one year, a call insurers said was unrealistic.

Breaking: Steward Launches Health Insurance

WBUR's Martha Bebinger

This just in from WBUR’s Martha Bebinger:

Steward, the state’s second largest hospital network, is launching a health insurance plan that will attract attention on price.

Steward says its plan will cost 20 to 30% less than coverage offered by other health insurers in Massachusetts. Members will be limited to doctors and hospitals in the Steward network unless they need highly specialized treatment. In that case, Steward will send patients to competitor hospitals, Brigham and Women’s or Mass General. Children will be able to see pediatricians affiliated with Partners Health Care

The Steward coverage is offered through Tufts Health Plan. This move will help Steward fill its growing network of hospitals and get ready for the move to global payments under which doctors and hospitals manage budgets for their patients’ care. Steward CEO Ralph de la Torre is scheduled to outline his plans to the state’s largest employer group, Associated Industries of Massachusetts, this morning.

Related: Today’s column from the Globe’s Steve Syre is headlined “Hospitals’ Cost Gamble” and ends:

The next step: Big medical groups developing their own coverage plans, limiting care mostly to their hospitals and doctors.

Steward – which emphasizes the lower cost of its network – has offered a plan like that to employees for a few years and now covers about 8,000 patients. I’m sure it would love to turn that plan into a commercial product sold by insurance companies (Steward chief Ralph de la Torre will speak this morning before the Associated Industries of Massachusetts. I wonder if it will come up in the conversation.).

One way or another, efforts to control medical costs will continue to shift financial risks to health care providers. That means doctors and hospitals will have to think more like insurers.

Trend: You Choose More Costly Care, You Pay More Out Of Pocket

At the bottom: Practical tips

First, Eric Schultz, chief of Harvard Pilgrim Health Plan, the #1-ranked plan in the nation, told me with utter certainty: This is the wave of the future. Soon it will be as common as having a 401K plan.

That got my attention. Then Attorney General Martha Coakley put it at the top of her list of what should be done to cut Massachusetts health care costs. And the state’s Group Insurance Commissioner, Dolores Mitchell, declared at a hearing, “I think it’s an idea whose time has now finally come.”

What’s the idea? Please pay attention, because there will be a test on this topic — the next time you’re choosing health insurance.

The concept is called “tiered” health insurance. It is a major national and statewide trend. It has both major upsides and major downsides. And it goes roughly like this:

One way you can lower your painfully high health insurance premiums is to sign up for a plan that limits the doctors and hospitals you can use to cheaper ones. That’s called a “limited network.” But it can be scary to rule out any chance of going to a fancier, more expensive hospital or doctor.

So now, increasingly, you can opt for a cheaper-premium plan that lets you sign up for a lower-cost “tier,” or level of health care, but also gives you an out: If you ever want to get care that’s ranked by your health insurer in a more expensive tier, you can. You’ll just have to pay more out of pocket in a co-pay or deductible — maybe a lot more.

“What tiering does is it lets the consumer, the member, make a choice every time they have a medical need, and that makes people more comfortable,” said Jim Roosevelt, chief of Tufts Health Plan, which is ranked a close #2 in the nation and has about one-third of its members in tiered plans. Health insurance, after all, “is supposed to relieve the fear of the unknown,” he said.

Everybody’s Doing It

Blue Cross Blue Shield of Massachusetts made a big splash this winter when it introduced its “Hospital Choice Cost Share” plan, which would charge members up to $1,000 in co-pays if they choose (in non-emergency situations) to go to the 15 hospitals it ranks as high-cost.

It sparked some controversy when it was announced. To many — including me — it is daunting to contemplate giving up free access to prestigious but expensive hospitals like Massachusetts General and Brigham and Women’s. But Blue Cross chief Andrew Dreyfus now says it’s one of the fastest-growing products in the insurer’s history. Continue reading

Health Care Chiefs On The Spot: Cost Trend Hearings, Day 2

So why are Partners hospitals so expensive? And why do health insurers pay so much more to one hospital than another? And why should low-paid Lawrence General Hospital get paid more if it’s earning good profits even now?

Michael Bailit, president of Bailit Health Purchasing, might want to consider a second career in television journalism. Fairly but unsparingly, he asked some of the leaders of the Massachusetts health care establishment today difficult questions that cut to issues at the heart of the state’s ever-rising health costs. Watching them answer made this morning’s Day 2 state hearing on health care cost trends actually, even, kind of fun. (If I feel this way, does it mean I need help?) Our Day 1 coverage is here and here.

Above, Partners HealthCare chief Dr. Gary Gottlieb answers Michael’s question about why costs are high at Partners. To sum up his answer in a word: Investments, in everything from technology to training to safety. Michael also pressed Gary a bit on whether some price variations are “unjustifiable.” What’s unjustifiable, Gary responded, is the underpayments to some high-quality hospitals. Michael: Can there be such a thing as overpayment? Gary: “Absolutely.”

Below, Tufts Health Plan chief James Roosevelt Jr. explains why Tufts pays more to one hospital than another of comparable quality, and admits in so many words, “Sometimes we pay higher payments because of market power.” Attorney General Martha Coakley’s report last week implicated the market clout of some health care providers as a key cause behind high payments that are helping to fuel rising overall costs.

And here, Lowell General Hospital’s president, Normand Deschene, explains why he thinks his hospital should be paid more. Continue reading

Breaking News: Harvard Pilgrim, Tufts Call Off Merger Talks

The Boston Globe reports that the courtship between the state’s second and third largest insurers, Harvard Pilgrim and Tufts Health Plan, is over.

The two companies, which have been conducting merger talks for a month, “have now determined that we are stronger as individual competitors than one company,” Eric Schultz, president of Harvard Pilgrim, said in a joint statement from the two insurers.

During their due diligence, the companies said, they concluded the savings and efficiencies they were seeking would be more difficult to achieve than initially thought, while integrating their organizations would prove more expensive and time-consuming.

Here’s the joint press release:

Boston – The Board of Directors of Harvard Pilgrim Health Care and Tufts Health Plan today announced that they will not pursue a merger of the two non-profit health plans. On January 25, 2011, Harvard Pilgrim and Tufts Health Plan signed a non-binding Memorandum of Understanding (MOU) as the first step in exploring a possible merger of the organizations. The MOU authorized a due diligence period for both organizations to internally review the merits of a potential transaction.

“We have spent the last six weeks in a vigorous process thoughtfully exploring the practical feasibility of combining our two organizations for the benefit of our customers, members and the many other people we aim to serve. As a result of this process, we have now determined that we are stronger as individual competitors than one company,” said Eric Schultz, president and chief executive officer of Harvard Pilgrim Health Care. “Both organizations will continue their work to keep high quality health care accessible and affordable, while at the same time investing in community programs and initiatives.”

During the due diligence period it became apparent that the savings and efficiencies both organizations were seeking would be more complex to achieve than initially envisioned and the integration of the two organizations would be more costly and time-consuming than anticipated when discussions first began.

“The due diligence process provided us with the opportunity to carefully explore whether our organizations are operationally compatible. We made the thoughtful determination that while we are in the same business, our operations are very different and, in many important aspects, not fully compatible without significant changes to existing processes and applications,” said James Roosevelt, Jr., president and chief executive officer of Tufts Health Plan. “Based on the information we have received in the due diligence process, we now believe this decision is in the best interest of those we serve: our members and customers. We walk away from these discussions with great respect for the leadership at Harvard Pilgrim and remain respectful competitors in the Massachusetts market.”

The two organizations are the highest ranking health plans in the nation for customer service and quality. As the #1 ranked health plan, Harvard Pilgrim Health Care operates in Massachusetts, Maine and New Hampshire; while Tufts Health Plan, ranked #2, operates in Massachusetts and Rhode Island.