Audio clip
Kevin Bloye
Erlanger employees are "raising Cain" over a proposal to shift their health benefits to a less expensive but more restrictive insurance plan.
The employees "are raising Cain, it sounds like, but they're not sure it's going to do much good," said Dr. Marcie Burton, a pediatrician at Children's Diagnostic Center who treats a number of children of Erlanger staff.
At issue is a change in Erlanger's health insurance that hospital executives said they still are evaluating.
No final decision has been made on shifting from BlueCross BlueShield of Tennessee's Network "P" to Network "S," described on the insurer's Web site as focusing "more on affordability." Though Network S has lower premiums for enrollees, it pays less to doctors, and fewer doctors participate.
Erlanger spokeswoman Pat Charles said in a statement that the hospital will provide details to employees on their benefits when the plan is finalized next month.
"For anyone to make a definitive statement at this point in the negotiations is premature and inappropriate," according to the statement.
Hospitals, like most employers across the nation, are struggling to contain costs in an economic recession. To cut expenses, hospitals increasingly are putting off construction projects and equipment purchases, laying off staff and trimming health benefit plans.
WHAT IS A PROVIDER NETWORK?
Health care providers, such as doctors and hospitals, can agree to be part of an insurance company's provider network, accepting negotiated, discounted payments for medical care provided in exchange for the insurer directing patients to those physicians or facilities who are "in network."
The privately insured patient pays a smaller portion of the cost of care for these in-network visits, as opposed to facing higher out-of-pocket costs to see a physician who is not in network.
The amount of reimbursement an insurance company pays to its network providers varies by the network. Networks also have varying monthly premiums for those who are insured under the plan, with cheaper premiums for more limited networks.
"It's one of the most difficult economic times that hospitals have ever faced, just like the rest of American industry," said Kevin Bloye of the Georgia Hospital Association.
An association survey found:
* Nearly three out of four hospitals are postponing or reconsidering capital expenditures in clinical technology, information technology or building and renovations to cope with the recession.
* 60 percent have already conducted layoffs or are considering them.
* 37 percent are cutting services.
Erlanger CEO Jim Brexler said executives are listening to employees' concerns and "taking their comments into consideration."
PRESSURE TO CHANGE
At the hospital's May budget and finance committee meeting, Chief Financial Officer Britt Tabor said the hospital had plans to switch from BlueCross's Network "P" to Network "S."
The hospital's preliminary 2010 budget said the change would save the hospital 3 percent on employee benefits expenses. Erlanger covers nearly 8,000 individuals, including hospital employees and their dependents.
Last year the hospital spent more than $25.5 million in medical plan claims, said Erlanger senior vice president of human resources Gregg Gentry in an e-mail. That's a 20 percent increase in medical expenses per member over the past five years, said Mr. Gentry, who declined requests for a telephone interview.
In a June 3 memo to Erlanger employees, Mr. Gentry said a change in benefits was intended to encourage workers to use the hospital's services, as opposed to its competitors.
Internist Dr. Collin Cherry said he understands that rationale but hopes the hospital will offer employees a choice of networks.
"It's their (Erlanger's) money. They want to steer those patients to their facilities. ... But don't disrupt patient care any more than is necessary," he said.
The Chattanooga doctor said some of his patients who work at Erlanger heard about the planned changes this month and the "rumor mill" took off. Many Erlanger workers worry that their longtime doctors are not included in the new BlueCross BlueShield of Tennessee network.
"We're all working on incomplete information. That's what's very frustrating," said Dr. Cherry, internal medicine physician and CEO of Beacon Health Alliance, a primary care practice. Beacon is not part of Network S, primarily because of its lower reimbursement for physicians, he said.
Dr. Burton, whose practice also is part of Beacon, said her group is contacting all its patients to let them know that families insured under Network "S" would have to pay more expensive out-of-network costs.
NETWORK VARIABILITY
A more limited network can be appealing to many consumers who feel affordable monthly premiums outweigh their need to have a broader choice of providers, said Russ Blakely, a Chattanooga employee benefits consultant.
Network "S" has about 10 percent lower reimbursements to doctors in the network, and as much as 15 percent to 20 percent lower monthly costs for those enrolled in the plan, compared to the more comprehensive Network "P," which includes virtually 100 percent of the area's physicians, Mr. Blakely said.
In Hamilton County and the 10 surrounding Southeast Tennessee counties, Network "S" includes about 78 percent of the physicians that are included in Network "P," said Bob Fox, vice president of provider networks for BlueCross BlueShield of Tennessee.
Mr. Blakely said there are good choices in Network "S," but there are some issues.
"The problem is the groups that are missing tend to be among the more popular physician groups in town," including Beacon, Galen OB/GYN, the Chattanooga Heart Institute and the area's two largest pediatric groups, Highland Pediatrics and Children's Diagnostic Center, he said.
Memorial Hospital also does not participate in Network S.
"The biggest limitations in the network are primary care physicians," including gynecologists, he said. "In health care one of the toughest things is to tell someone either your child's pediatrician or your wife's OB-GYN is no longer in the network," Mr. Blakely said.
"Tougher" Choices
The recession has contributed to higher levels of uncompensated care and lower admissions because patients are putting off routine care and elective surgeries, which often are the most lucrative to hospitals. Hospitals are facing increasing pressure to minimize expenditures, said Craig Becker, president of the Tennessee Hospital Association.
Officials with Memorial, Parkridge Medical Center and Hutcheson Medical Center in Fort Oglethorpe said they have not recently made significant changes in their employees' health plans as a means of cutting costs. They acknowledged that they are constantly evaluating their budgets and looking for places to save.
"We've had some reductions, we've done some restructuring, we've done the things that all other hospitals in town are doing," said Jim Treglown, chief human resource officer at Hutcheson. "We're all in the same boat."
Health care reporter Emily Bregel has worked at the Chattanooga Times Free Press since July 2006. She previously covered banking and wrote for the Life section. Emily, a native of Baltimore, Md., earned a bachelor’s degree in American Studies from Columbia University. She received a first-place award for feature writing from the East Tennessee Society of Professional Journalists’ Golden Press Card Contest for a 2009 article about a boy with a congenital heart defect. She ...
What's sad about this is: even though Erlanger will save money with Network S, is that BCBS will likely retain the same profit.
This is just a passthrough to the employee.
I hope that Erlanger is looking at options aside from BCBS.
Our company could not afford BCBS, and we would not go with Network S.
So we went with a competitor, a for-profit insurance company.
Too bad the local not-for-profit is less affordable than the national for-profit insurance.
It's even more sad when you realize that our local not-for-profit makes more than 59 million dollars in net profit in a bad year.
I just realized that Erlanger is self insured and uses the BCBS network.
Soooo, this is now nearly 100% about Erlanger.
Still, they should shop their carrier.
This is the reason why we need to go to a government run healthcare system. Insurance companies are all a bunch of crooks who do not look out for their insurance carriers. The only thing the insurance companies want is more money so they can pay outrageous salaries to their CEO's. The time to get the organized mafia out of the picture is now, lets pass a government run healthcare system. The insurance GREED is what has this country in the position we are in right now. Blue Cross of Tennessee refuses to pay any claims turned in to the anyway's, so why keep giving them our money.
Over 70% of the polls show that the American people want and need health care reform. How much higher does it need to go before our self-righteous congress gets together to work out a solution?
It is really sad that the major groups-such as Galen Ob-Gyn, Chattanooga Heart Institute and Beacon Gyn as well as others who operate out of Erlanger are not on the list for employees to be treated by-so many people,-some, will be uprooted from 3-4 doctors they have seen for years. Only to have to scramble to find another-when there are not that many to choose from on the list. Bad management-it will only bite them in the butt. Not a good recruiting tool when you cut benefits to the bare minimum.
This article makes it sound like the employees will get a reduction in their premiums when in fact they have been told that moving to this worse network will increase their premiums. And as Roy Exum of The Chattanoogan so aptly put it, Erlanger has not given their employees a raise in over 2 years. While they have stated that the employees are supposed to receive a raise this year, it will only be taken away by the increase in premiums. And as was stated above, this is not a good recruiting tool, nor is it a good retention tool... I think you gey my drift.
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