Blue Shield of California’s Tiered Hospital List to Incorporate Quality of Care Standards

Blue Shield of California today plans to announce a new program that will include hospitals that meet "accepted standards for high-quality care," as well as those that offer lower-cost services, on the preferred list of Blue Shield's tiered hospital plan, the New York Times reports. Under the plan, Blue Shield members pay an additional $200 copayment or 10% of the hospital fee when they receive care at facilities not on the health insurer's preferred list. For hospitals that appear on the list, members pay a standard copayment. Blue Shield, one of a "handful" of health insurers that have implemented tiered hospital plans, announced the new program in response to "sharp criticism" from some hospital officials, who said that Blue Shield "publicized and favored certain hospitals solely on the basis of lower costs." Under the new program, hospitals considered "more expensive" could appear on the preferred list "if they develop systems that protect patients against medical errors and conduct extensive surveys asking recently discharged patients" about the quality of care that they received.

The new program includes several measures advocated by the Leapfrog Group, a coalition of more than 90 large health care purchasers. In a Leapfrog Group study in New York, five large employers have paid 4% bonuses to 10 hospitals that employ physician specialists to supervise intensive care patients and have installed or have begun to install computerized physician order entry systems. Blue Shield's preferred list includes more than 300 hospitals and will likely increase as a result of the new program, the Times reports. Some hospitals, such as the University of California-Davis Medical Center, initially refused to accept Blue Shield members after the health insurer did not include the facilities on the preferred hospital list, "which could be seen as a blot on their reputation and might scare some patients away." However, UC-Davis Medical Center CEO Robert Chason said that the new program now will "begin to take quality into consideration as well as cost" and offer a "better way for patients as well as hospitals" (Freudenheim, New York Times, 6/26).