Managed Care rant

More Blue Cross BS in Massachusetts

“Blue Cross BS.” Credit for that phrase goes to my friend Mike Allen. And he has never been more on the mark!

Here’s the latest in my rant against that very rich, misguided organization – BCBS of Massachusetts:

In a statement released to the press on November 15th, BCBS of Massachusetts reiterated its commitment to affordable health care:

“The rising cost of health care is one of the biggest challenges facing our community today. We know that health care costs are making our businesses less competitive, squeezing the budgets of government at every level, and consuming too much of family incomes.

At Blue Cross Blue Shield of Massachusetts (BCBSMA), making quality health care affordable is our top priority. As the state’s largest private health plan, we are committed to playing a leading role in developing meaningful and sustainable solutions to rising costs.”

This quote is fascinating given that same day, November 15, 2011, Blue Cross and Blue Shield of Massachusetts, Inc. (BCBSMA) and Blue Cross and Blue Shield of Massachusetts HMO Blue, Inc. (BCBSMA HMO Blue) announced a combined after-tax net income of $78.9 million for the Quarter. Couldn’t some of the $78 million been used to reduce the cost of healthcare for people in Massachusetts? So tell me again how BCBSMA is making quality healthcare affordable? Is it by raking in huge profits on the backs of the smaller, less powerful hospitals and community physicians? Yes. And by jacking up health insurance premiums on consumers and small businesses. The only entity that wins is BCBSMA.

Meanwhile, BCBS refuses to fairly compensate smaller organizations: Tufts Medical Center and NEQCA. This is truly a David and Goliath story. Did you know that Partners has rates that are 20 to 40 percent higher that Tufts Medical Center? How does that happen? Ask BCBSMA. And the doctors in Tufts Medical Center’s network (New England Quality Care Alliance) are paid at least 20% less than other similar practices in their markets.

Under the current Alternative Quality Contract (AQC) with BCBS, Tufts Medical Center and its physician network have successfully enhanced quality and controlled costs. That’s exactly what the program was designed to do. Tufts Medical Center was the first academic center to participate in the highly touted AQC contract with BCBSMA. Under the contract, Tufts Medical Center and NEQCA are providing some of the most cost-effective, high quality care in the region. Their physicians are among the most efficient providers in Massachusetts. Publicly available data shows Tufts Medical Center and NEQCA’s Total Medical Expense, or TME, (the amount of services and costs for the care we provide patients) is well below other provider organizations. In fact, Tufts Medical Center and NEQCA are 7 to 8 percent below the Eastern Massachusetts TME average. Partners is 10% ABOVE and Children’s is 7% ABOVE. (2010 DHCFP, BCBS Health Status Adjusted Commercial TME for Eastern Massachusetts, weighted according to membership) Interestingly, Partners and Children’s, two of the most expensive systems in the state, were just rewarded by BCBSMA with 2-3 percent increases. The message: It pays to have clout when you negotiate! The big, powerful and expensive institutions just get bigger and more expensive. And consumers end up footing the bill. Meanwhile, the affordable organizations struggle to survive in this climate.

So where did Tufts Medical Center and NEQCA go wrong? I’ll tell you. They never should have believed that BCBSMA would reward efficient, lower cost, high quality providers. Compensation from BCBS is about power and negotiating clout, not about reducing the cost of healthcare. When BCBSMA left the negotiating table earlier this week, it was reported that the two parties were $11 million apart on a $1.2 billion contract. That is very close to the $8.6 million sum that BCBSMA is paying its former CEO, Cleve L. Killingsworth, as part of his exit deal. Pretty sweet. Killingsworth’s predecessor, William Van Faasen, received $16.4 million in retirement benefits in 2006. BCBSMA’s track record of excessive executive compensation was well documented in The Boston Globe. Click here for the story.

Here’s the deal: BCBSMA talks a good game, but only when it is shaking down providers in the name of “affordable healthcare.” Beginning in 2009, the Division of Healthcare Finance and Policy, the Boston Globe and the Massachusetts Attorney General exposed Blue Cross Blue Shield’s unfair practices that led to significant payment disparities between health care providers who offer the same services at the same quality level. So today, no one should be fooled when BCBSMA poses as the defender of affordable care. Case in point: BCBSMA reported $155.5 million in profits for the first 9 months of 2011, yet continues to raise premiums on its members.

Yes, both Tufts Medical Center and NEQCA are my clients. I am loyal to them and know the situation well. I believe that they are committed to providing the best in care at a reasonable rate. And I am outraged by the actions of BCBSMA. If you are equally outraged, please take the time to let BCBS know. Tweet about it. Call BCBSMA at 800-262-2583 or email To learn more you can go to Or, send a letter to the editor:

To write a letter to The Boston Globe:

To write a letter to the Boston Herald:

1 comment on “More Blue Cross BS in Massachusetts

  1. Scott E Downer

    Tuffs Medical Center saved my child’s life at 13 i lost every thing i had to keep her alive ! we still go there 3 times a month i will not trust my kids life with any other.And they Make ya feel at Home .Go There see the things they bring to the community .this is such an embarrassment to our Healthcare system !

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