Blue Shield Adds Quality Evaluations

Blue Shield of California said Wednesday that it would start evaluating hospitals under its “network choice” program in terms of quality and patient experience, not just cost-effectiveness.

The move is the latest in a series of policy changes by health insurers to balance cost control and quality assurance. For Blue Shield, it is another step toward the development of a broad database that eventually will help its 2.3 million members decide which of the nonprofit insurer’s 350 hospitals offer the most effective and cost-efficient medical care.

The plan builds on the fact that Blue Shield already has separated hospitals into two groups--choice or affiliate--based solely on costs. Choice hospitals are considered less expensive than affiliate hospitals.

Under Blue Shield’s network choice, there are no changes to a member’s out-of-pocket co-payment or co-insurance amounts when using a choice hospital. Members who use affiliate hospitals pay an additional co-payment or co-insurance fee of $200 or 10% of the hospital’s fee each time they are admitted to a hospital that is not on Blue Shield’s preferred list.

But few, including Blue Shield, regard the cost standard alone as an effective way for consumers to make decisions about what hospital to choose.

Health-care costs are expected to rise this year at an even greater rate than last year’s double-digit increase, experts say, with hospitals driving a big portion of that continuing surge.

As employers are expected to push more of those costs to their employees, the goal is to encourage patients to make the most cost-efficient decisions.

The Blue Shield effort is one of many underway. But the database will take years to create.

“There is no real silver bullet here. It’s discussed as consumer-driven health care, but it’s also part of a larger desire by employers to make their workers more aware of the real costs of care,” said Alwyn Castle, a spokesman for the Washington, D.C.-based Center for Studying Health System Change.

“This is a very important step forward,” said Dr. Arnie Milstein, medical director for the Pacific Business Group on Health. “We’ve had a market in California that rewarded low costs, and we need to do more to balance that with rewards for quality and transformative information technology advances. The more insurers that follow in this direction the better.”

Blue Shield is responding to that push by employers, and the next phase will be the gathering of cost and quality information based on two sets of standards, said David Joyner, senior vice president for network services.

Among the first set of standards, developed by a group mainly comprising Fortune 500 companies called the Leapfrog Group, will include whether hospitals have a computerized entry system for medications and dosages and properly staffed intensive care units.

The other standards, known as Patients’ Evaluation of Performance in California, will take a long time to gather and will serve as a kind of exit poll for patients.

PEP-C is a collaborative effort of the California Institute for Health Systems Performance and the California Health Care Foundation. Among other things, it will ask patients to rate their hospital care based on such criteria as respect for patient preferences, information and education, physical comfort and emotional support.

When the program is put online in October, Joyner said, the first measuring standard will be whether the Blue Shield-affiliated hospitals have implemented the Leapfrog and the PEP-C standards. The next phase is building the database of patient evaluations.

Bob Chason, chief executive of the hospital at UC Davis, said that cost and patient outcomes alone are misleading standards since some more-expensive hospitals can have superior patient outcomes that mitigate those costs, and because hospitals like his often deal with sicker and more difficult patients than other facilities.

Many experts hope that these databases eventually will include such things as the rate of opportunistic infections or complications, the rates at which procedures were ultimately deemed ineffective and had to be redone through another hospital stay and further medical procedures, and whether the hospital had a shorter patient stay because it was too aggressive in moving people out of the hospital or because it was more effective in carrying out the procedures without any problems.

“Any standard of outcomes has to take that into consideration. Otherwise, you are mixing apples and oranges,” Chason said.