It’s been a little more than a year since Peter Andruszkiewicz was named the new president and CEO of Blue Cross & Blue Shield of Rhode Island, the state’s largest commercial health insurer, a time marked by big changes with the health care landscape, both locally and nationally.
When Andruszkiewicz’s selection was first announced, Providence Business News did an interview with him to ask him about his future plans. Now, a year into the job, we wanted to find out how his plans were working out, given the changing realities of health care in Rhode Island.
PBN: Blue Cross & Blue Shield of Rhode Island recently eliminated 43 jobs as part of its restructuring efforts to reduce administrative costs. Are there further reductions in the workforce planned? How you met your goal of 15 percent administrative cost levels?
ANDRUSZKIEWICZ: BCBSRI has an obligation to its customers to regularly evaluate the efficiency and effectiveness of the organization. Through a series of corporate initiatives we have lowered our administrative costs over the last several years by approximately $12 million. These lower costs have directly impacted our customers and members. We are also encouraged by our ability over the last several years to lower medical expenses by $139 million, but our work is far from done as our customers remind us every day.
We will continue to focus on improving the affordability, safety and quality of the health care system in the state on behalf of our members. As we’ve stated publicly, we are focused on a steady reduction of our administration costs toward a goal of 12 percent of premium by the end of 2014.
PBN: In the first few months, how has the new contract with Coastal changed the dynamics in the response by physicians to new, shared savings?
ANDRUSZKIEWICZ: One of the most exciting things about the evolution of our relationship with Coastal is that our conversations now are focused on quality of care and creating a differentiated patient experience in the medical home. It is very exciting to see the effect of aligned incentives between provider and payor and to know that working together we can lower the overall cost of care, while improving clinical outcomes.
Coastal has been a true innovator in their efforts. After successfully offering evening and weekend hours at some locations, Coastal has begun providing patients primary care access seven days a week, 365 days a year. Coastal is also teaming up with emergency room physicians at several Rhode Island hospitals to better identify and coordinate the care Coastal patients receive when they use emergency room services.
We are very excited about the Coastal partnership and believe together we are paving the way for a more affordable health care system in our state. While it is still very early to assess the results from the shared savings agreement, Blue Cross is committed to these unique partnerships with providers to improve the affordability and quality of care for our members.
PBN: What has been the response from consumers and companies to the new health insurance products that Blue Cross has recently introduced to the Rhode Island marketplace?
ANDRUSZKIEWICZ: The innovative new products Blue Cross has developed over the past year have been guided by the feedback we have received from customers who are looking for additional ways to engage in leading a healthy lifestyle. Products like LifeStyleBlue, VantageBlue and BlueValue Direct are designed to maintain affordability by offering opportunities to earn incentives and rewards that help employees and individuals stay healthy and active.
For example, BlueValue Direct 2500, which was our most popular product during the recent Direct Pay open enrollment, is designed specifically for an individual looking for the lowest possible premium – as low as $3 per day. The most important feature though is that it protects against catastrophic medical expenses while providing full coverage for many preventive services.
In addition, our new small group plan, LifeStyleBlue offers reimbursement for healthy activities such as weight loss classes or participation in organized walks, and a deductible that reduces in year two if the member completes an electronic personal health assessment, receives an annual physical and participates in a personalized wellness activity. By providing incentives like these, we are encouraging healthy living while working to address affordability for customers and members.
PBN: Now that the Supreme Court has ruled that the federal health care reform is constitutional, what are the challenges here in Rhode Island to further the implementation of health care reform?
ANDRUSZKIEWICZ: Blue Cross has a longstanding belief that all Rhode Islanders should have access to high quality, affordable health care coverage. The Supreme Court decision will allow us to build off of the momentum that has been established in Rhode Island over the past several years. Unlike other states, Rhode Island has made great strides moving forward on health insurance reform, but there is still a lot of work to do.
While health insurance reform is important, equally important are efforts to create a true system of care in the state around a patient and his or her needs. We must move faster toward new ways to pay providers for healthcare services.
In fact, Blue Cross has implemented innovative contracts with physicians and hospitals to shift the way we pay for services so that payment is based on quality rather than volume and to begin to build a true system, around the patient, that coordinates care through a high performing patient-centered medical home program.
Finally, Blue Cross is very supportive of other efforts in the state, such as the Coordinated Health Care Planning initiative designed to assess the state’s current infrastructure and short- and long-term health care needs, in order to ensure that Rhode Island has the right capacity to address the needs of its residents. We know there is still a lot of work to be done, but we look forward to our continued work to help improve the quality of life of our customers and the people of Rhode Island by improving their health.
PBN: How is Blue Cross defining “wellness” in terms of behavioral health investments? The recent cuts in reimbursements for providers has many therapists worried about being able to accept insurance, limiting access.
ANDRUSZKIEWICZ: Long before parity became the law, Blue Cross was committed to behavioral health and the importance of these valuable services to our members in their overall wellness. Blue Cross continues to be committed to providing our members with access to high quality behavioral health services.
In fact, for the past year, we have funded the co-location of behavioral health providers in some patient-centered medical homes so that members who require services to meet both their physical and mental health needs can receive coordinated and comprehensive care.
We are also in the process of creating an advisory committee of behavioral health providers, which will help guide Blue Cross in its development of a voluntary quality and effectiveness of care program.
For our participating behavioral health and medical providers, Blue Cross bases our fee schedules on the federal Centers for Medicare & Medicaid Services fee schedule for Medicare, which uses resource-based relative value scale pricing approach. By using this well-established rationale to guide reimbursement, Blue Cross also has the ability to make adjustments for geographic location and practice expense.
Recently, we determined that our commercial reimbursement fees were inconsistent and made adjustments. We understand that changes like these can be difficult, but we hope that behavioral health providers will join us in embracing the concepts of health care quality measurement and value-based reimbursement, which will benefit both our members and participating providers.
Blue Cross & Blue Shield of Rhode Island,