Collaboration Is Key for Hospitals, Insurance Firms

Bottom line for both sides is quality, affordable healthcare With eight months of pointed contractual negotiations between Saint Francis Hospital and Blue Cross/Blue Shield of Tennessee finally completed in November, the question remains in this new healthcare world order, “What has to change for local hospitals and insurance companies to work and contract together?”According to insurance payers, hospitals need to realize insurers are constrained by cost. According to hospitals, the consensus is that they don't want insurance companies to go to the lowest bidder.“I think the payers are going to go to the lowest common denominator — the ones charging the least,” said Craig Becker, president of the Tennessee Hospital Association. “It’s not always fair, because frequently a hospital might have higher cost because it may have more intense services, and it may have more uncompensated care.  It’s going to impact negatively those hospitals providing care for our most vulnerable populations. That’s my biggest fear.”Roy Vaughn, vice president of corporate communications, Blue Cross/Blue Shield of Tennessee, said that is not always the case. Citing Centers for Medicare and Medicaid Services (CMS) data, he said Saint Francis is one of the most expensive hospitals in the state, and they were able to reach an agreement even after greatly strained relations.“Consumers want and need us to work together,” Vaughn said. “We prefer a collaborative approach that achieves quality, affordable care for our members and fair compensation for the providers in our networks. We have always considered Saint Francis facilities valued partners in the Memphis area. We are pleased to have reached an agreement that allows us to keep our members’ coverage affordable.”Explaining that it will work diligently to resolve any contractual negotiations, Saint Francis’ senior vice president and spokeswoman, Marilynn Robinson, said the hospital is “focused on the outcome.”“We will work so our patients can have the care they deserve. The bottom line is we want to be able to serve the community,” she said.Serving the community in this rapid-fire change environment has produced a new philosophy of contractual negotiation for a few of the larger local hospital systems.“In partnership with our physicians, we work in collaboration with our health insurance partners to meet the challenges of the changing environment,” said Donna Abney, executive vice president, Methodist Le Bonheur Healthcare. “We think the only way to meet individual and purchaser needs and expectations is through a culture of collaboration, innovation and trust. We work very hard to achieve that.”That philosophy was echoed by Vaughn, who cited a “preferred partnership” with Methodist Le Bonheur. The model they espouse is more integrated, less fee-for-service, which is where experts say the market is headed.“We are moving toward a population-based model where insurance companies will say ‘we are going to make you responsible for following these 20,000 covered lives. We are going to pay you one flat fee for their healthcare,’” Becker said. “Therefore, hospitals are going to spend a lot more time trying to keep people appropriately out of the hospital and keep them healthy. That’s the idea behind it.  Whether it will work or not, we will see.”The Regional Medical Center at Memphis agreed, explaining the market demands proactivity rather than reactivity.“I think the insurance industry needs to be more forward looking and help providers transition into an environment of wellness and preventable care,” said Rick Wages, chief financial officer. “Rather than waiting until people get sick and come to the ERs, we do things as they are identified rather than waiting until they are catastrophic and expensive. Maybe those insurance companies are willing to pay for a different kind of service on the front end. Maybe we jump that chasm of the way healthcare is perceived and delivered.”All sources interviewed kept using a key word: collaboration. The collaborative approach paves the way for more give-and-take from both sides, more physician input, more effective patient-care planning, more efficiency. Baptist has coined a name for its version of this partnership: Select Health Alliance.Officials explained it is a clinically integrated network developed in response to the impending population-based healthcare model. “We have partnered with physicians and brought the first payer contract to the table (Aetna) and have had a different conversation between physician-hospital-payer,” said David Elliott, vice president of managed care. “We focus on initiatives like in high-tech radiology, we do the right test the first time and reduce duplicate testing. We are doing that with all three parties at the table instead of trying to impose something on each other. Less inefficiency.”Meanwhile, market forces, insurance exchanges, the Affordable Care Act, cost shifting and so many unknowns loom for both sides as they strive to be more efficient to stay afloat. In particular, entities like The MED are keeping close to governmental authorities for their perspective to be heard.“We are more a safety net, high-level tertiary care hospital in terms of the trauma and the high risk and sick baby nursery we run,” Wages said, “and then we are also a safety net for more of the indigent population for the Shelby County area. We are keeping our conversations going with the governor’s office and the commissioner’s office in TennCare, talking with our state and local legislators so they can understand what we are faced with.“We just need to work together to create win-win opportunities. We all need to be in business to provide quality care to our patients and we must be innovative and creative in how we do that.”