Newspaper Clipping - Newspaper Clipping Scan - Blue Cross Blue Shield begins 51st year - 8/29/19837M
The Blue Cross and Blue Shield of Minnesota building, as seen from Highway 13, has won awards for its modern architecture.
Photos by Jean Van Pelt
Blue Cross Blue Shield
Health insurance enters a new era, as company begins 51st year
by Jean Van Pelt
The cost of Minn esota physi-
cians' services increased 14.9
percent in 1982 ar d 12.2 per -
cent in 1981.
Hospitalizatic n charges
statewide rose 1" .1 percent
during 1982 and 15 5 percent in
1981. In the pas 10 years,
hospital charges it Minnesota
have quadrupled, going from
about $100 a day tc $400 a day.
These charges have increased
about twice as fast as the com-
sumer price index.
Blue Cross and Blue Shield
of Minnesota (BCI S), based in
Eagan, is attempti; ig to curtail
these rapidly escalating costs
through a varie y of cost -
containment progi ams. These
programs represent a major
change in the way health care
coverage has been ad-
ministered for tie past 25
years, said Jean Haskell, BCBS
public relations director.
After BCBS's fiscal reports
showed losses of $:'.6 million in
1980, $7.7 million in 1981 and
$4.6 million in 1912, the com-
pany began an in iovation in
health care philosophy,
characterized by BCBS's
AWARE program
Traditionally, BCBS
cooperated will all doctors and
hospitals, Haske l said, ex-
plaining that health insurance
basically paid for whatever
doctors or hospitals wanted to
charge. Facing cor tinually in-
creasing losses because of ris-
ing health care cos s, the com-
pany was forced tc make deci-
sions regarding % /hat BCBS
would pay for, Ha ;kell said.
During studies o1 claims sub-
mitted to BCBS by doctors and
hospitals, it was found the
range of charges v'as wide, in
some cases double, while
treatments provided were
similar, Haskell sa d.
BCBS's answer eras been to
make more econor tical use of
the benefits throul h AWARE
and other programs, rather
than cut certain benefits, she
explained.
"We had to decide what was
a reasonable limit ," Haskell
said. The AWARE program
for hospitals, intr rduced this
spring, and a similar program
for doctors which will be in-
troduced soon, are attempting
to stifle health care costs.
After computing average
daily payments to area
hosptials, the company chose a
maximum daily payment equal
to the 55th percentile of
charges for all area hosptials.
This means BCBS will pay
slightly above the community
average for hospital care, but
no more.
Here's how AWARE works:
• BCBS contacted 27
hospitals in the metro area; 20
chose to participate in the pro-
gram this year.
• currently, only groups can
join AWARE. President An-
drew Czajowski estimates a
company savings of $10
million annually. The program
may be introduced to in-
dividual subscribers later.
• hospitals participating in
AWARE have agreed to accept
BCBS's daily payment as pay-
ment in full. Hospitals who
chose not to particiapte are free
to charge the patient for
amounts above what insurance
pays.
• people covered under the
AWARE program are free to
go to any hospital in the metro
area, but may risk paying a
portion of the bill if the
hospital has not agreed to ac-
cepts BCBS's payment as pay-
ment in full.
• if a person in AWARE re-
quires emergency care or
hospitalization outside the
Twin Cities, the person is
covered as usual.
The message is that people
are going to have to become
more cost conscious medically.
"We're saying there are some
good buys out there and we'll
cover you for the good buys,"
Haskell said, comparing in-
flated rates charged by some
hospitals with the rates charged
by other hospitals for the same
services.
People have the choice of
which hospital to go to,;
Haskell said, but they should'
be willing to pay if they choose
a hospital that isn't par-
ticipating in AWARE.
People's attitudes have
started to change as health care
costs continue to rise. But the
change is just beginning,
Haskell said.
"People would have found
programs like AWARE un-
palatable a few years ago," she
said. But as costs increase, and
the difference in charges be-
tween hospitals increases, peo-
ple want to become more aware
of where their dollars are
spent, she said.
AWARE's success has been
phenomenal— approximately
90 percent of BCBS's group
health insurance subscribers
have joined AWARE.
BCBS is the state's largest
health insurance carrier and
covers about 20 percent of all
Minnesotans. For about 25
years, the company was so
dominant that there wasn't
much reason to be competitive,
Haskell said.
This business is very much
affected by the economy, she
explained. As inflation,
unemployment and health care
costs skyrocketed, it became
evident that both people's at-
titudes and the industry had to
undergo major changes, she
said.
Employees in mail room sending 15,000 letters each day.
The claims department of Blue Cross and
Blue Shield of Minnesota employs 75 to 80
people who answer questions over the
phone and in writing all day.
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