Blue Cross to offer limited-network plan

BLUE CROSS Blue Shield of Rhode Island headquarters. / COURTESY BLUE CROSS & BLUE SHIELD OF RHODE ISLAND
BLUE CROSS Blue Shield of Rhode Island headquarters. / COURTESY BLUE CROSS & BLUE SHIELD OF RHODE ISLAND

In 2013, Blue Cross & Blue Shield of Rhode Island will introduce a new health-insurance product, a shared-savings, limited-network plan, in collaboration with one or more of the state’s seven hospital systems, Blue Cross President and CEO Peter Andruszkiewicz told Providence Business News.
“I originally thought that because of our size and scale that we could make delivery-system changes without doing a tiered, limited network,” Andruszkiewicz said July 31. “I was naïve.” Blue Cross is going to be taking steps in 2013, he continued, to introduce the new plan, building on the approach of the recently completed shared-savings contract with Coastal Medical. “We will be working with enlightened partners, who can go faster in terms of contracting and incentive changes,” he said.
When asked which hospitals and physicians groups he was talking with, Andruszkiewicz declined to identify any specific hospital or group practice. He said Blue Cross had been talking with virtually every hospital system, whether their contract was coming up for bid this year or not, to share with them plans for where Blue Cross wants to go in the future.
The Blue Cross executive acknowledged that similar tiered, limited-network products had been introduced into the Massachusetts market by Tufts Health Plan in collaboration with Steward Health Care, and he anticipated that UnitedHealthCare of New England would also be developing a similar plan.
The new plan reflects Blue Cross’ goals to improve access, quality and affordability for its members. Many current plans allow unlimited access. Limited-network plans would restrict choices by customers in exchange for lower costs and the hope of higher quality of care. The growth of such plans also reflects the changing health care landscape, which Andruszkiewicz said includes the pending sale of Landmark Medical Center in Woonsocket and the Rehabilitation Hospital of Rhode Island to Steward Health Care. Not matter what the resolution, (and the conflict between Steward and Blue Cross over reimbursement contracts), the delivery of health care services for residents served by hospitals in Rhode Island will be forever changing, he said.
“The status quo is not acceptable, and we cannot keep advocating for the status quo,” he said.
When asked to describe Blue Cross’ vision of the future health care-delivery system in Rhode Island, Andruszkiewicz said, “We would like to see a health care system that gets reorganized around the patient, where financial incentives are changed drastically, where caregivers are better coordinated and services are better coordinated.”
Hospitals do cancer care and neurosurgery and lots of expensive procedures in the state at multiple institutions, he continued, but “we don’t do enough of them at almost any institution,” he said.
Instead, Andruszkiewicz said that Blue Cross wanted a system that was more organized. “You have a seven-hospital system in Rhode Island, and I used the term ‘system’ loosely, because we really don’t have a system in Rhode Island,” he said. “We have seven different hospital entities that compete against each other, with expensive TV and radio ads, for patients.”
Andruszkiewicz said he was a strong advocate of the statewide planning process now under way, but wondered whether the changes happening in real time would supersede the eventual plans. The new Rhode Island Health Benefits Exchange, scheduled to begin operation in late 2013, Andruszkiewicz said, will not be a fix for the problems with health care – which he identified as the need for payment reform and the need to increase the number of people in the overall insurance pool.
“The exchange is going to offer people a new mechanism to choose health-insurance plans,” he said. “I like to think of it like the travel sites online that let you look up your options for airfare and hotels. It will simplify the system, which is a good thing, and it will give consumers more transparency about prices. But in and of itself, it will not change the costs of health care, or transform the way that care is delivered.”
As an example of the way that payment incentives needed to change, Andruszkiewicz cited a hospital’s use of a CAT scan and an MRI. “The two things [under the current payment system] you care about is how much use of that machine you’re going to get, and how many hours you can have that machine cranking.”
In the future, he continued, the trick will be to use those machines only when you need to, because it will be a cost item, not a revenue item. “You will want to use it only when the patient really needs it.”
Though times have changed, Andruszkiewicz said he recognized the strong emotional attachment that residents in Woonsocket, Westerly, Pawtucket and South County have to their community hospitals. “It’s akin to a college-reunion kind of mentality,” he said, explaining that many residents were born in these hospitals, their lives were saved in these hospitals, and their parents may have died in these hospitals. •

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