BLUE CROSS: May Lose Catholic Healthcare West And Columbia
Blue Cross of California -- in the wake of "an embarrassing defeat at the hands of Sutter Health" -- is facing similar challenges by Catholic Healthcare West and Columbia/HCA Healthcare Corp. The San Jose Business Journal reports that the two hospitals "are threatening to terminate their contracts with Blue Cross unless the plan agrees to pay them more to treat its patients" -- the same threat Sutter made good on last month. "We've started the process for termination, and we're prepared for it. It's going to take certain things from Blue Cross for us to stay," said Helen Robbins, Columbia's vice president for managed care. While that would mean "a significant" part of Columbia's patient base would no longer be covered by Blue Cross, Robbins said her company "is prepared to withstand a downturn in patient count if necessary." Catholic holds the same position and has notified Blue Cross it will terminate its contract July 1 if an agreement is not reached. Catholic contends Blue Cross "rolled back" its reimbursement rates two years ago and has not raised them since. "This really has resulted in unsustainable losses," said Catholic spokesperson Nancy Cartwright, who also noted Blue Cross' policies have affected the quality of patient care. But Blue Cross did not seem alarmed. "You're always in negotiations; it's the nature of the business. All of a sudden everyone is focusing on this because of Sutter," said Blue Cross spokesperson Cynthia Coulter.
In The Lurch
But others say recent events reflect a bigger trend in the health care system. "This seems to be the first time that there's more than one entity standing its ground," said Santa Clara County Medical Association Executive Director William Parish. "What we're seeing is a new kind of contract negotiation," said Mary Wallace of the California Healthcare Association. "Five years ago, people would have signed anything Blue Cross put in front of them," said Wanda Jones, health care consultant with New Century Health Care Institute. Now that many HMOs are raising premiums, doctors and hospitals "want a piece of the pie," said Jones. But the extra costs are likely to be passed onto customers, the Business Journal reports (Delevett, 6/15 issue).