SOURCE: Business Benefits Insurance

March 22, 2010 11:00 ET

New Insurance Products May Revolutionize Health Care in Massachusetts, Edholm of Business Benefits Insurance Writes

ANDOVER, MA--(Marketwire - March 22, 2010) -  A new line of innovative products from Blue Cross Blue Shield of Massachusetts might help control costs and bring more transparency to health care in the state, Jim Edholm of Business Benefits Insurance writes in the March 15 issue of Massachusetts Lawyers Weekly

Health insurance premiums are soaring because some big hospitals and providers keep raising their fees faster than inflation, he writes. But a recent report from the Massachusetts attorney general's office found that price differences were not related to the quality of care. Instead, "the market clout of certain providers was the main factor driving the price of services," the report said.

"Oligopolistic practices among some providers drove increases," Edholm writes. "They raised prices because they could."

Blue Cross is fighting back with a new set of products that address cost pressures by introducing a triple-tiered network. The three tiers are Enhanced (best), Standard (middle) and Basic (bottom). The tiers apply only to primary care physicians and to hospitals, not specialists. 

If you use an Enhanced tier provider, you'll have a smaller copayment than with a Standard provider. Using a Basic provider will cost you even more, Edholm notes.

Blue Cross assigns doctors and hospitals to tiers by comparing cost and quality against peer providers using widely accepted and utilized measures. All providers start in the Standard tier. In order to move up to the Enhanced tier, a provider has to excel in both cost and quality, Edholm points out. Having either lower-than-acceptable quality or higher-than-acceptable cost will drop a provider into the Basic tier. 

"This coverage doesn't actually reveal the contractually protected price a provider charges, but it offers a very strong proxy to help us identify the 'best' provider to use for a particular purpose," Edholm writes.

Business Benefits Insurance (www.bbibenefits.com) is an employee benefits planning firm in Andover, Mass. Edholm's benefits blog can be read at http://bbibenefits.wordpress.com. More information about HSAs and other plan options is available by contacting Edholm at JimEd@bbibenefits.com or calling 978-474-4730.

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