Thursday, March 25, 2004
Might Low Cost and High Quality Finally Pay Off?
Some time ago, during a meeting of a hospital committee on which I serve, I suggested that if a hospital had better outcomes and lower costs than its competitors, it ought to do all right.
It seems that is becoming more than a flip comment. This morning’s Boston Globe reports that as of next July 1, Massachusetts state employees who subscribe to the Tufts Health Plan will be given the choice of two groups of hospitals, labeled “tiers.” In the “top” group of 15 hospitals, there will be a co-pay of $200 for each overnight stay. In the “bottom” group of 51 hospitals, the co-pay will be $400. All of the academic medical centers, save Boston Medical Center and Baystate Medical Center in Springfield, are in the “bottom” tier. The “top” tier is considered to offer the most value in terms of both cost and quality.
Employees who choose fee-for-service coverage through a company called Unicare will pay $228.20 for family coverage if they choose a network that includes all hospitals, $168.16 if they choose one that includes mostly community hospitals.
Tufts will make its plan available to all employers next January 1. At that time it is scheduled to offer a third, even “lower,” tier that will have a co-pay of $600.
Harvard Pilgrim reportedly is developing its own “tiered” plan with higher premiums for workers who choose higher-cost primary care physicians. That plan is scheduled to be available to private employers next January 1 and to state employees six months later.
Tufts and Blue Cross and Blue Shield of Massachusetts first offered tiered networks three years ago, but they were based on cost only and the reaction was mixed. This time quality is being factored into the equation.
Richard Lord, president of the Associated Industries of Massachusetts, was quoted as saying that after three years of insurance premium increases, “Employers are really going to go for this.”
Referring to a meeting in Chicago yesterday of major employers pushing for uniform standards that allow them to push patients towards the best providers, Susan Connolly of the Boston office of Mercer Human Resource Consulting observed that “The momentum is building.”
So maybe hospitals with the lowest cost and the best outcomes will reap some benefit after all, regardless of how they rank on the scale of international fame.
Some time ago, during a meeting of a hospital committee on which I serve, I suggested that if a hospital had better outcomes and lower costs than its competitors, it ought to do all right.
It seems that is becoming more than a flip comment. This morning’s Boston Globe reports that as of next July 1, Massachusetts state employees who subscribe to the Tufts Health Plan will be given the choice of two groups of hospitals, labeled “tiers.” In the “top” group of 15 hospitals, there will be a co-pay of $200 for each overnight stay. In the “bottom” group of 51 hospitals, the co-pay will be $400. All of the academic medical centers, save Boston Medical Center and Baystate Medical Center in Springfield, are in the “bottom” tier. The “top” tier is considered to offer the most value in terms of both cost and quality.
Employees who choose fee-for-service coverage through a company called Unicare will pay $228.20 for family coverage if they choose a network that includes all hospitals, $168.16 if they choose one that includes mostly community hospitals.
Tufts will make its plan available to all employers next January 1. At that time it is scheduled to offer a third, even “lower,” tier that will have a co-pay of $600.
Harvard Pilgrim reportedly is developing its own “tiered” plan with higher premiums for workers who choose higher-cost primary care physicians. That plan is scheduled to be available to private employers next January 1 and to state employees six months later.
Tufts and Blue Cross and Blue Shield of Massachusetts first offered tiered networks three years ago, but they were based on cost only and the reaction was mixed. This time quality is being factored into the equation.
Richard Lord, president of the Associated Industries of Massachusetts, was quoted as saying that after three years of insurance premium increases, “Employers are really going to go for this.”
Referring to a meeting in Chicago yesterday of major employers pushing for uniform standards that allow them to push patients towards the best providers, Susan Connolly of the Boston office of Mercer Human Resource Consulting observed that “The momentum is building.”
So maybe hospitals with the lowest cost and the best outcomes will reap some benefit after all, regardless of how they rank on the scale of international fame.
