Generally speaking, employers - and brokers - want health plans to provide their clients and employees with access to a full suite of participating physicians and hospitals, which makes it remarkably difficult for any health plan in this region to simply say “no” if the plan believes the payment rates being demanded by the provider are too high. This question was tested pretty thoroughly in 2000, when Tufts Health Plan and Partners HealthCare went toe to toe over what Tufts was willing to pay Partners. In the end, the employer community told Tufts that even though only ten percent of Tufts’ members used Partners’ hospitals and physicians, 100% of Tufts’ employer accounts and their employees wanted in network access available to those facilities, and they better sign a contract with them. It was a watershed moment, and the message has remained pretty constant ever since. The plans in MA have responded, and generally speaking, the statewide carriers - HPHC, Tufts and BC/BS of MA - have all major providers in their networks.

There are some exceptions. Harvard Pilgrim sells a product called “Granite State” in NH that features NH hospitals and Massachusetts community hospitals, and requires a higher member co-pay to go to a teaching hospital in Massachusetts. Partners HealthCare decided not to participate in this product and the plan is about 5-8 percent cheaper than our other all access offerings in New Hampshire. Despite the higher co-pay to go to AMC’s, and the total absence of Partners, a lot of folks in NH have signed up for the plan over the past few years, with no issues or problems around care and care delivery.

As the MA Connector rolls out individual plans for people this summer that have limited provicer networks, it will be interesting to see if people sign up for coverage that has lower out of pocket costs, lower premiums, but limited provider networks - of if they choose the broad network, and the higher premium and higher out of pocket costs that come with it. Stay tuned!

Glan asks about Wellpoint’s plan to compensate staff on the health of their members. Since I don’t know the details of the program - and the press release gave precious few of those - it’s hard to tell what’s really on the line here - but I think the notion of saying to health plan executives and staff that the health of our members is our business is a good one, and putting money on the table to incent people to pay attention to it is a good move. Again, it’s hard to draw too many conclusions from this, but it’s an interesting step in an unusual direction. I would add that my compensation - along with the compensation of most senior managers at HPHC - is affected by the plan’s performance each year on HEDIS - which is a national dataset concerning the quality of the care provided to HPHC memberes - and on CAHPS - which measures member satisfaction with HPHC. If we don’t finish in the 90th percentile on both of these measures during the year, then I - and others - get dinged on my - and our - pay.

Barbara asks a good question about the consumer/patient. What’s in it for them, and whatever happened to prevention and education? My next post will be about this - and will, hopefully - address some of Barbara’s questions.

I think on the issue of prevention and patient education, Harvard Pilgrim does a lot of these different things to help to control costs.

I don’t know the exact cost cuts of those kinds of initiatives, but it is an intregal part of how the Care Management department at the company operates.

I agree that helping to educate a consumer about things such as when they should be getting preventative screenings, as well as sending reminders about them are very important. If we can help to have a healthier consumer, in the end it can only assist in making health better, and thus helps pass on the cost savings.

I am a broker in Worcester, love the blog. Very interesting to see the break -out and it shows that the tiering of prescriptions has at least slowed the growth in comparison to other expenses.

The problem as I see it is that if every doctor and every hospital is in every network, how exactly are we creating competition. If hospital and doctor costs are going up to fast, then an HMO has to make a decision whether or not they want to keep them in their network.

At first this will cause problems if you were to drop a hospital or doctor group, but if it helps lower the costs to provide health insurance groups and brokers will understand.

Bill Randell

As we age, we’ll use more health care, and most analysts believe that this increase in demand will create personnel shortages in the nursing and trained technician fields. That’s likely to be exacerbated by the difficulty of managing any 24/7 operation - like a hospital or a nursing home - in an economy that offers lots of other choices to people who might want to work a less demanding day. In fact, I think most hospital leaders would say that shortages and shift issues in 24/7 institutions have already created pressure on labor costs for key trained positions, and that that trend is likely to continue going forward.