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Tiering Hospitals Pays Off For Calif. Blues Plan

MANAGED CARE July 2003. © MediMedia USA
News and Commentary

Tiering Hospitals Pays Off For Calif. Blues Plan

MANAGED CARE July 2003. ©MediMedia USA

Blue Shield of California members are changing utilization patterns as a result of hospital tiering, say company officials. The company is making further changes in its Network Choice program. David Joyner, Blue Shield's senior vice president for network management, tells the Contra Costa Times that "there's some evidence that people are starting to think about their decisions in a different way."

Network Choice, launched in April 2002, stipulates that the 1 million Blue Shield members enrolled through all but the largest employers have to choose between "choice" (no charge) and "affiliated" ($100–$300 daily copayment) hospitals.

For large employers, the program will be offered next year as an option to reduce premiums.

Of the 307 hospitals that contract with Blue Shield of California, 84 fall into the low-cost category, the Contra Costa Times notes. The program tiers hospitals according to cost and some generally recognized quality measures.

With its disclosure that savings are being seen (though no numbers were offered), Blue Shield announced that it was further revising Network Choice by adding more quality measures. The total number of quality measures is now 14.

"It is also now taking into account a hospital's mix of patients, giving credit to hospitals that care for sicker patients," the Contra Costa Times reports. "In addition, Blue Shield has revised how it groups hospitals to compare their relative costs. Before, it divided California into only eight regions. Now, there are 32." Expect plenty more HMOs to launch tiered plans in the near future.

"I think we're going to see this coming out in most markets," predicts Brad Kimler, a health care consultant with Hewitt Associates. "Right now, most people really don't know what costs are." Under a tiered plan, they can take baby steps toward finding out.