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Blues' new strategy: Empower consumers

BlueCross BlueShield of Florida is devising ways to put the consumer back in the price equation. That includes making them pay more out of pocket for everything from hospital care to drugs.

By KRIS HUNDLEY, Times Staff Writer
© St. Petersburg Times
published March 17, 2002

The top medical officer of BlueCross BlueShield of Florida flew into the Tampa Bay area in the corporate Cessna recently to discuss the rising cost of health care.

Dr. Robert Forster, chief medical officer for the Blues in Jacksonville, was joined by Dr. Barry Schwartz, who handles contract negotiations with providers throughout north Florida.

The two men put the blame for double-digit insurance increases on the usual suspects: doctors who overhospitalize, hospitals that keep expanding and drugs that keep getting more expensive.

But the biggest blame, they said, lies with the consumer, who no longer appreciates the true cost of the care they demand.

"When you're only paying a $5 co-pay for a $1,300 MRI, you don't question the need to have an MRI monthly," Forster said.

Like other insurers, BlueCross BlueShield is devising ways to put the consumer back in the price equation, making them pay more out of pocket for everything from hospital care to drugs. The Blues' new strategy, which will be rolled out in South Florida this summer, is called "Empower," and it aims to do more than just provide health care. Under discussion are plans to include everything from dental plans to banking in the Blues' new benefits platform.

Here are excerpts from Forster's discussion with the St. Petersburg Times:

* * *

Q: Where are health care costs going?

Forster: Only up. In the summer of 2000, we started noticing a bump in costs, and we didn't know if it was a blip or a trend. By November, we started seeing dramatic trends in even highly managed products like HMOs. Costs were rising twice as fast as we predicted, and we had to increase our premiums 30 to 40 to 50 percent just to catch up.

Q: Has managed care failed?

Forster: Managed care has been very successful on the West Coast, had spotty success in the Midwest and has not been at all successful here in Florida. So I'd say the success of managed care has been very geographical. The people in Florida felt it was much too restrictive.

Q: Why do people hate their health plans?

Forster: Health plans have been demeaned since time immemorial because of control, and as a physician I didn't like the lack of autonomy. It's something that wears on physicians. We've been the bad guys. But health plans are the competitive tension. Without us, health care would have been unaffordable 20 years ago. But it seems the harder we try, the more we're demonized.

Q: What is Empower?

Forster: An employer will be able to choose up to six different plans, which the employee can then select based on cost and need. We're taking away the 'Os' -- HMOs and PPOs -- and though we could construct something that looks like an HMO, there will be other benefits including possibly banking or dental or alternative treatments like acupuncture. It will be highly flexible, with multiple benefits.

For instance, I'm fairly healthy, so I'd like the plan with the highest deductible and then put all my money in an MSA (medical savings account). Others might want first-dollar coverage of all health costs.

Q: Won't this drive the healthiest employees to one plan and the sickest employees and their families to another with a much higher premium?

Forster: We can't allow extremes. Those with illnesses can't find that insurance coverage is unaffordable. Our enemy is the uninsured.

Q: Why do you say that?

Forster: Given our country and the wealth we have, it's a tragedy that so many don't have protection against catastrophes. And as that group grows, it gains a political voice that can react in a volatile manner. It might lead to pressure for some kind of institutional payer, like Medicare, or some other model without competition. Anything where the government controls reimbursements will ultimately destroy the quality of health care.

Q: You mention quality, and I understand that one feature of Empower may be that members pay more out of pocket depending on which hospital they use. Where is the quality measure there?

Forster: We're within months of having standardized report cards on hospitals and physicians, and that's information that will empower the employees. These report cards will include things like which hospitals use intensivists (doctors specializing in intensive care) and whether they have computerized their ordering systems.

In hospitals today cost is not based on quality but on contracts. There is no incentive for hospitals to improve. Why would you spend the money on computerized ordering systems, which can reduce the number of prescription errors, if payers weren't pushing for it?

Q: Why would BlueCross BlueShield venture into banking and financial services?

Forster: The model is that BlueCross will act as the integrator of many benefits and that could include things like banking. This is a pilot format and its success will depend on the attractiveness and receptiveness of providers and consumers. We're trying to ask customers what they want.

Q: They want the best health care at the lowest cost.

Forster: Yes. And wouldn't life be grand.

-- Kris Hundley can be reached at or (727)892-2996.

BlueCross BlueShield of Florida

HEADQUARTERS: Jacksonville

HISTORY: Founded in 1944 as Florida Hospital Service Corp., the insurer eventually became an independent licensee of the nationwide Blue Cross Blue Shield Association, which has 44 members.

STATUS: independent, tax-paying mutual health care company

NUMBER OF MEMBERS: 3.6-million, largest in Florida

2001 REVENUES: $5.46-billion

2001 NET INCOME: $92-million

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