Blue Cross/Blue Shield of New Jersey’s
new managed-care network may be the future of health care in the
state, but some question the ultimate cost.
Five years ago,
Carol Talerico of Riverdale was diagnosed with cancer. She and her doctor
knew she could be staring death in the face, so she decided to commute to
Manhattan for aggressive treatment at Sloan-Kettering Medical Center.
“Many people at
Sloan-Kettering are referred by New Jersey hospitals that couldn’t do any
more,” she says. “You cannot compare the quality of care, because they are
a cancer hospital.”
treatment was successful; the cancer is in remission and she’s back to work
full-time. Her medical expenses were covered by the Blue Cross/Blue Shield
of New Jersey (BCBSNJ) policy she got through her employer. But what
concerns her is that she might not be so lucky the next time under the new
managed-care network announced by BCBSNJ president and CEO John J. Petillo
this past April.
will be comprised of 56 New Jersey hospitals and their affiliated
physicians, but will no longer automatically reimburse claims from
out-of-state hospitals, specialty hospitals or 29 of the state’s 85
acute-care hospitals and their physicians. Exceptions will be made to
extend coverage to non-network hospitals and physicians for emergency
cases, Medicare and Medigap recipients, and other extenuating
circumstances on a case-by-case basis.
The sacrifice in
terms of quality and personal choice
is too great for Talerico. “I’ve
been seeing this doctor for five years, and he saved my life. I wouldn’t switch to save
Both the New Jersey
Hospital Association in Princeton and the Lawrenceville-based Medical
Society of New Jersey, a physicians’ group, have criticized the plan for
limiting choice. Under the managed-care network, over 30 percent of the
13,000 physicians currently covered by BCBSNJ would be affected. Blue
Cross is working with this group to
attain privileges at network hospitals. William Healey, assistant vice
president of government relations for the New Jersey State Chamber of
Commerce, notes “There are already bills in the state Legislature to blast
this out of the water.”
countermeasure, company executives have held public forums across the
state to build support for the managed-care concept. Hillman argues that
the concerns of doctors and hospitals are not necessarily about quality
and choice for the patient. “Bear in mind, physicians are the slowest to
embrace managed care anywhere….It’s a threat to their autonomy and ability
to earn,” he says. “Besides, the patient doesn’t pick his or her own
hospital, it is the physician who decides.”
Instead of quality
or choice, Blue Cross/Blue Shield emphasizes through it managed-care
network affordability, accessibility and a new vision of the health care industry.
Affordability. Hillman cites studies from the four-year period from 1987 to 1991
showing that managed-care networks have had cost increases of 37 percent,
compared to 57 percent increases under traditional fee-for-service plans.
While Blue Cross reps are vague on how much their new plan will do to cut
health care costs, Hillman does promise
“only single-digit premium-rate increases, instead of 30 percent to 40
percent increases.” He predicts its bare-bones policy will cost about
$1,500 for an individual and in the two- to three-thousand-dollar range
for a family.
Accessibility. Other parts of the same health care reform package voted into law last
November are designed to make all health insurance, whether it’s
non-profit BCBSNJ or a private company, more accessible through open
enrollment and “community rating” that doesn not discriminate based on age, gender, ethnicity or presence of a “previously
existing condition.” This will take some of the financial burden off BCBSNJ, which has been the
insurer of last resort, and hopefully reduce the number of uninsured, said
to be approximately 900,000 New Jersey residents.
Choices For The
Future. In the future, says
Hillman, “the consumer is going to have to get more educated. The [managed-care] choice won’t be
between different policies, but different networks. What will
differentiate carriers is customer
service, price and their network.”
For someone like
Talerico, there are two options. She could switch to a carrier whose
network includes her doctor and hospital of choice, or purchase a rider on
her BCBSNJ policy. The rider would cover about 70 percent of the tab at
non-network facilities in return for higher quarterly premiums. Hillman
and Petillo decline to specify how much higher those premiums would be.
Response. Most business owners
are breathing easier because the problem of cost is finally being tackled,
misgivings aside. “We hear all the time from human resource directors
complaining about their premiums going up,” said Healey. As a result, he
and William Faherty Jr., president of the New Jersey State Chamber of
Commerce, “think BCBSNJ should be given a chance to prove this managed-care principle.”
Eileen M. Shrem
views the cost vs. choice debate from a unique perspective. Because she is both an independent insurance agent as well as president of the New
Jersey Association of Women Business Owners (NJAWBO), she sympathizers
with both sides of the debate.
“It’s only getting
cheaper by cutting out services. The most expensive policy will be what we
have today. There’s not more coverage for preventative care of more
efficiency,” she says.
Even Shrem says she isn’t “going to fault
Blue Cross/Blue Shield on the managed-care principle. Any NJAWBO
opposition would be because we’re not getting the full story,” she says.
“People are taking positions on hearsay. We don’t have all the facts.
They’re still working on [the five insurance plans].”
excluded from the BCBSNJ network now seem accepting of managed care. Tom
Casey, spokesman for Dover General Hospital where 13 percent of its
patients are BCBSNJ subscribers, set the new tone in an interview recently
when he said, “Even of the 13 percent, we’ll retain a certain number –
through emergency cases, for example – and this does not threaten our
financial viability. Over the past three or four years, the number of Blue
Cross/Blue Shield patients has been dropping anyway. They used to [comprise] 30 percent, but other insurance companies are picking them up….Dover
General participates in 10 different managed-care networks, like
Aetna, Cigna, Prudential and U.S. Healthcare.”
But will these
private health care networks be able to compete against Old Blue? Well,
they’ll just have to cross that shield when they come to it.
Network news: John
Petillo implements a new managed-care network for patients.