BCBS of MN demotes some famous hospitals to Tier 2 status –and hears them complain

Blue Cross and Blue Shield of Minnesota is using a combination of cost and quality measures to sort hospitals into two tiers. Fifty-two hospitals are in Tier 1 and 16 in Tier 2. Patients who go to the Tier 2 hospitals will pay double the usual co-insurance, according to the Minneapolis Star Tribune.

Tier 2 hospitals include famous names like the Mayo Clinic. Of course all the hospitals in Tier 2 are complaining that the methodology is unfair and superficial, and that cost plays too much of a role.

The Blue Cross move is a small step toward using quality ratings to drive patient volume to specific hospitals and physicians. In the near future we can expect to see better data on quality as well as the introduction of patient satisfaction data for hospitals and physicians. In Minnesota, this effort is being spearheaded by MN Community Measurement and in Massachusetts by Massachusetts Health Quality Partners.

As insurers and patients take this information into account, brand names alone will no longer be enough to ensure high market share and bargaining power with health plans. Patients, payers, and cost-effective, high-quality community hospitals and physicians will be the winners.

May 5, 2005

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