Patients Would Lose In Blue Cross-Tufts Medical Center Dispute

By Martha Bebinger (@mbebinger)
Nov 15, 2011, 9:17 PM
9 Comments

BOSTON — Blue Cross Blue Shield members who see doctors at Tufts Medical Center may have to find a new physician starting in January. The state’s largest insurer and the hospital have reached an impasse in contract talks. Blue Cross sent letters Tuesday warning patients of the possible change.

‘Work It Out’

To get a patient’s perspective, I walked into one of the glass-walled studios at WBUR where Dave Faneuf, a WBUR anchor, had just finished a newscast. Faneuf 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 ones who’ve been in there, they’re the ones who’ve written the notes. If I have to go back, they’re the ones I want doing [the surgery].”

But if Tufts and Blue Cross cannot come an agreement on the contract that expires on Jan. 17, 2012, then Faneuf and about 88,000 other Blue Cross members would have a month to find new doctor. Pregnant women and patients with chronic illnesses would have three months.

“That’s absolutely unacceptable,” Faneuf said. “Get to it, guys, and work it out.”

Rates At The Center

The dispute is, of course, about money. Tufts Medical Center says its latest request is for a 3 percent increase each year for the next three to five years. Blue Cross says Tufts doctors are willing to take less, but that Tufts wants much higher rates for hospital services. Blue Cross Senior Vice President Jay McQuaide says Tufts is already making a 15 percent profit on hospital charges.

“They’re earning a profit when they care for our members, they’re paid comparably to other teaching hospitals in eastern Massachusetts,” McQuaide said. “And they’re seeking rate increases that are inconsistent with what other hospitals have already accepted.”

Tufts Medical Center CEO Eric Beyer has some problems with that analysis. He says Tufts is different from the “comparable” hospitals to which McQuaide refers because it has a larger share of Medicaid patients. Hospitals say they lose money on Medicaid patients and many make up for the loss by boosting charges to private insurers.

And Beyer says Tufts has historically received significantly less for care that is just as good as Boston’s highest paid hospitals. Several recent state reports support Beyer’s claim. The point of those reports was to highlight the difference in payments, but they may be encouraging Tufts to demand higher rates.

“That kind of transparency, rather than making high-priced providers come down in price, will understandably make those who are getting lower rates question why their rates are lower,” said Harvard School of Public Health economist Meredith Rosenthal.

So on the one hand you have Tufts saying it’s time to close the gap between what it and the Partners hospitals are paid. And on the other hand you have Gov. Deval Patrick and employers demanding lower health care increases. The insurers are in the middle, says Massachusetts Institute of Technology economist Jon Gruber.

“The only leverage they have is on price so they have to squeeze what they can from the hospitals,” Gruber said.

Beyer, the Tufts CEO, says his request for a 3 percent annual increase is justified.

“We absolutely believe that our ask is in line with what the governor and others have called for,” Beyer said. “We are a very efficient provider. Our physicians have earned what they’ve been paid by being efficient. We absolutely believe that we are doing the right thing for the people of this commonwealth.”

Major employer groups disagree, saying that while Tufts Medical Center provides great care, businesses will likely side with Blue Cross’ efforts to limit hospital rate increases.

“There are no good guys or bad guys,” said Eileen McAnneny, with Associated Industries of Massachusetts. “It’s just we have to learn to do things differently and to provide care with a finite amount of financial resources.”

Tufts and Blue Cross reached a similar impasse almost three years ago and eventually settled a new contract. If they don’t resolve this dispute, tens of thousands Blue Cross members will have to find a new place for care or a new insurance plan early next year. The state Division of Insurance says it will “closely monitor continuity of care issues during any transitional period.”

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Anonymous

I would keep my doctor and switch plans unless there was a compelling reason not to. I’m on medicare now but while working in industry during the Ninties my health plan seemed to change every year forcing us to look for new doctors. This is the wonderful health care system we have in this country. You get the choice of the company selected plan, in my case selected by bureaucrats in Europe , or your own choice of a plan at ten times the cost.
Scatter15

Blue Cross Blue Shield of MA – 6 billion dollar profit last year.
Andrew Dreyfus, CEO, BCBSMA, $800,000 base pay, with bonuses, $1.8 million/year
Tufts Medical Center – struggling to care for its patients in a cash-strapped economy, yet Blue Cross Blue Shield of MA and Andrew Dreyfus refuse to increase reimbursements a measley 3% and disregard the welfare of their own members in the balance. So greedy and typical. Linda

Martha Bebinger

Hi Linda – please share the source for the 6B figure. Thanks – Martha

Michael

The bias of the story was subtle but noticable.

1)First line ” BCBS patient who see patients at Tuft Medical Center may have to find new doctors starting early next year.”�
Last line of the story ” If they don’t resolve this dispute…tens of thousands of …BCBS members will have to find a new place for care early next year.”

This suble spin to the story directs patients to find new doctors as opposed to getting different insurance. Bias for the insurance company.

2) You had BCBS quoted first attacking Tufts therfore making your listener wait for Tufts to defend themselves against the BCBS attack.

3) On a side note there was quote about how Medicaid reimbursement doesn’t cover their costs and that realistically the commercial payors higher reimbursement to offset the difference to keep the hospital running. Two points here- A) Why should Medicaid be allowed to reimburse below what the care costs? B) Hospitals are a business. If they aren’t earning money to cover thier costs they can’t pay their staff or other exhorbitant costs. We HAVE had hospitals in Massachusetts close because of this.

4)Remember- Hospitals missions are to care for patients. Insurance Mission to earn money.

Martha Bebinger

Hi Michael – you raise some good points. Thanks for taking the time to offer them.

On one – I should have included the “different insurance” option in the web story. On air, we offered it in the anchor tag to try to generate responses via Twitter an Facebook. I neglected to add that element to the web script.

On two – I don’t agree that the order of quotes in a story suggests bias.

On three “a” – when I ask state Medicaid officials this question – they dispute assumption that Medicaid reimburses below costs. What is the best neutral source on this point?

On four – who do we look to make health care more affordable?

Thanks again,
Martha

Dr. Sowwainu

I’m a primary care doctor, and have been one for two decades. For at least the last 10 years Blue Cross has raised their premiums to our small business, my practice, for my staff and me, between 10 and 15 percent a year.  We used to pay $500/month for a family plan for our staff, now it costs almost $2000/month, plus the only plan we can affort has a $2000 per person up front deductible. That’s a 4x rise in premiums in less than 10 years. The money they pay our practice, however, has risen a few per centage points a year, and this year not at all.  We are not receiving 2x what we got paid 10 years ago.

Every other cost in our practice has risen with, or higher than, inflation–postage, phones, internet, copy paper, medical supplies, and so on.

Due to hidden deals with other networks, these other networks are paid up to 3x more than we are for the same work with lower quality, or equal quality. Instead of cutting them back, BC/BS agreed only to limit the rate of rise for these other networks going forward, but kept their fees high. Not so for Tufts and its affiliated doctors. For them (me included) BC/BS wanted to cut the present rates, and not provide for any cost of living increases.

On top of that they demand “absurd and rediculous” standards for “performance” of our practice so that we are personally and financially responsible for a patient who doesn’t want to have mammograms, or a colonoscopy. BC/BS calls their system “pay for performance” so that if we perform well, we get “bonus” pay. But if we do perform, and even save them thousands of dollars by preventing admissions, or doing procedures in the office, we get paid less than their actual cost. So what we call it is, “punishment for performance”.

Each time these “financial” issues come up, the “medical economists” and all the other talking heads chime in about what “should be”. None of them have to make payroll every two weeks, spend hours each day doing work for which we are not paid–prescription refills, arranging referrals, negotiating with “overseers” so that our patients can get the tests they need, and for which a radiologist or surgeon will ultimately be the one who gets paid for what we do for free.

And BC/BS will gladly pay a pharmacy chain to do primary care vaccinations, after which we have to review the record of the event, add it to the medical record, and keep that record intact for seven years (or more, if the patient remains active), again, all for free. My accountant and my lawyer don’t work for free, why should I?

And BC/BS wants to obfuscate what they are doing by mis-citing the real numbers. The facts are, Tufts affiliated physicians only want to keep par with increased costs. Being paid fairly, and equally for what we do would also be nice.

Last time I checked, http://www.urbaninstitute.org, the IRS 990 forms for BC/BS of Mass (non profit organization) showed they had billions, that is with a capital “B”, of dollars in “reserves”, sitting in investment accounts. Plus they can raise their fees all through the year, but want us to be locked into multi-year contracts with piddling rises which don’t meet inflation.   I have to have a 2nd mortgagte on my home to cover my accounts receivable, which BC/BS can take its’s sweet time paying, or not pay at all if they want to change their rules in the middle of a contract.

The issue is, after all the dramatics, posturing, and press releases, that BC/BS doesn’t want to merely treat Tufts affiliated physicians fairly and equitably enought for us to survive. Especially those of us in private practice.

It is little wonder there are not going to be any more primary care doctors.

Ironically, if the Tufts physicians and BC/BS remain unable to resolve their differences, if my patients, and I have hundreds of BC/BS patients leave me and have to find another primary care doctor they will have little success in finding one. Moreover, if that new physician is part of one of the higher reimbursed networks and there are several out there, BC/BS will actually have to pay more for their care there then they would be by giving Tufts physicians the meager rise in payments they have requested.

By the way, we don’t call what BC/BS gives a “reimbursement”, since it is not coming close to paying us back for our actual costs.   It is a partial payment, so that those of us on the short end are subsidizing the more expensive, but not better, care, provided by other networks, for which BC/BS willingly pays them more.
Anonymous

Imagine how different this negotiation would be if patients were at the table…
Adele Pelletier

This is a shocking story that will make patients suffer from quality of care and anxiety. I have Medicare and can switch to AARP, which I prefer not too . I have several doctors at Tufts and have no intention of having an insurance company dictate my healthcare—where does all this end?

I see insurance companies trying to limit our meds. for there own reasons and not the patient’s well being. Patients need to be the first concern but the ” Bottom LINE” always wins. I am praying for a resolution to this insanity.
Olecronon

I find it ironic that BC/BS doesn’t want to provide Tufts Medical Center with a 3% yearly increase when they just agreed to a 3% yearly increase for Partners. And, to make the matter more confusing, the 3% increase for partners costs them significantly more because the base for Partners is significantly higher.

The conventional wisdom is that Tufts has no leverage in this game, but if Tufts stops taking BC/BS the cost of all those patients going to more expensive hospitals will be much greater than a 3% increase (I read that it could be at much as $60-$70m).

BC/BS – time to start thinking about the big picture and take care of your customers and the system. Stop focusing on the bottom line.