Yesterday, we noted that Blue Cross Blue Shield of Massachusetts was introducing a new product which established tiered co-pays for hospitals and MDs based on price and quality measures. Providers that charge more--or don't seem to perform well--cost consumers more out of pocket than those who are cheaper and/or better (by BCBSMA standards). I thought this was a unique, if predictable, response to an increasingly consumer-driven healthcare environment.
As it turns out, I was wrong. An alert medical group practice administrator wrote in to say that Blue Cross Blue Shield of Florida also had a tiered provider product--focusing exclusively on hospitals--and had been at it for more than two years. Today, I spoke with Dr. William Kerr, BCBSFL's chief medical officer, about that plan and its future.
BCBSFL's BlueOptions line, which includes the tiered hospital offerings, is one of the company's fastest growing product groups, Kerr says. BCBSFL developed the tiered offering in response to employer demand. "Many national employers are asking for ways for employees to get more skin in the game," he notes.
For its tiered offering, BCBSFL tiers hospitals based on relative cost. It doesn't use care quality ratings for tiering, though it does provide consumers with both quality and cost data. Typically, specialty hospitals aren't tiered, as there's usually not enough of a peer group in a particular geographic area. Pediatric hospitals are sometimes tiered, however, because their services are comparable to those offered in a traditional acute care hospitals.
To make sure that they didn't see a backlash from hospital execs, Kerr and his staff created a special network for the tiered option rather than imposing tiers on hospitals in their existing network.
"We have been concerned about how hospitals would react to this, so we intentionally did not take the existing network and suddenly split them out," Kerr says. "We did not do it without their involvement."
Employers who choose the tiered option are finding that they get more savings if the cost-difference between the tiers is greater, "It makes a big difference when the co-pays are very different," Kerr says.
For the time being, our medical group management informant can relax. BCBSFL has no immediate plans to tier MD practices.
That being said, though, BCBSFL is likely to keep developing the tiered hospital option, as such consumer-driven efforts are almost certainly the future of managed care. "What is important that patients start to understand is that not all hospitals have the same cost and quality," Kerr says. "It's important they start to make these tradeoffs." - Anne