Sacramento-Area Hospitals Dropped by CalPERS Had High Quality Ratings, Blue Shield Analysis Shows
Several of the Sacramento-area hospitals scheduled to be dropped from CalPERS' Blue Shield of California HMO network in 2005 were rated among the highest for quality in an analysis by Blue Shield, the Sacramento Bee reports (Rapaport, Sacramento Bee, 6/15). Last month, CalPERS' board voted to drop 38 of the most costly hospitals from its Blue Shield HMO network to control premium rate increases, which have risen 57% since 2002. The move, which includes 13 Sutter Health facilities, is expected to save CalPERS $36 million in 2005 and $50 million annually after that. Some 53,000 CalPERS members statewide will be affected by the decision. Sen. Deborah Ortiz (D-Sacramento) said she has asked state officials to audit the financial data that CalPERS used to make its decision (California Healthline, 6/9). She also has asked state HMO regulators to investigate whether CalPERS' decision will adversely affect patients' access to care.
In making its decision, CalPERS used information from a cost and quality analysis of all hospitals in the Blue Shield HMO network. CalPERS has not released the information, citing confidentiality agreements. But according to an unnamed spokesperson for Blue Shield, the HMO examined whether hospitals participated in industry surveys that track patient satisfaction, efforts to implement technology to reduce errors and evaluations by licensing authorities, the Bee reports. Hospitals' quality scores were based on the number of surveys for which they were eligible based on the range of services they offered, the number of surveys they completed and how well they scored. To rate costs, Blue Shield compared prices it paid for various medical procedures among the hospitals.
According to the analysis, which was given to the Bee by an unnamed source involved in the CalPERS discussions, four Sacramento-area Sutter hospitals that received high-quality ratings were dropped in favor of hospitals with lower quality ratings. All of the Sutter hospitals except Sutter Davis were in the highest price category, charging Blue Shield at least 25% more for services than other local hospitals charged, according to the analysis. At the same time, five local hospitals retained by CalPERS had lower quality and cost scores. The decision to drop Davis has been a "flash point for critics of CalPERS' decision" because it was eliminated in favor of Woodland Memorial Hospital, although both facilities had similar low-cost ratings and Davis had higher quality ratings, according to the Bee. Loren Suter, an executive with CalPERS' health program, said Davis was dropped because "Sutter told us in negotiations that we could not remove other more expensive Sutter hospitals in Sacramento unless we also removed the Davis hospitals." However, Sarah Krevans, Sutter's chief executive for the Sacramento Region, said it was CalPERS' decision to drop the Davis facility.
"It's troubling that we talked so much about cost and quality and then really looked at the money side of things without asking so much whether capital investments or newer technology might be the cause of higher costs," Charles Valdez, the only CalPERS board member to vote against the move, said. CalPERS Board President Sean Harrigan said, "This was about making a tough choice that we ultimately felt needed to be done if we were going to have any ability in the future to control health costs for CalPERS or anybody else in the marketplace." The unnamed Blue Shield spokesperson said, "The ratings and comments on quality are simply a reflection of how hospitals did on certain surveys recognized in the industry as one of many indications of quality" (Sacramento Bee, 6/15).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.