Insurers try a new way to steer patients toward favored doctors

MINNEAPOLIS -- Some health insurers are adding a new twist to the old approach of charging more for what's known as out of network care. They're measuring individual doctors' quality and fees -- and then charging more to see doctors deemed more expensive.

Not surprisingly, it's a major change that has some doctors and patients upset. Many doctors warn that quality care could be at risk if they are sifted on the basis of cost, while patients grumble about being forced to switch physicians to avoid higher charges.

UnitedHealth Group Inc., the nation's second-largest health insurer, began a pilot program this year and has signed up three large companies in 13 states, including more than 7,000 General Motors Corp. workers. In some cases, workers who see a doctor through UnitedHealth's new Performance program pay nothing up front; but if they go outside the network, they must pay 20 percent of the charge.

Medica, the second-largest health insurer in Minnesota, is rolling out a plan July 1 that, in its typical form, will charge patients just $15 to see doctors on its least expensive list, versus $45 for the next tier and $65 for the most expensive tier. The coinsurance -- the portion of a hospital bill covered by patients -- typically ranges from 10 percent for the lowest tier to 30 percent for the most expensive.

The changes are already raising anger and concerns among health-care providers and patients.

BJC HealthCare in St. Louis, which runs 13 hospitals, has told UnitedHealth Group it will end their relationship unless UnitedHealth overhauls its new insurance product. Blue Cross Blue Shield of Minnesota created an uproar when it left the Mayo Clinic of Rochester and other well-regarded hospitals off its preferred list.

Employers and workers both have a lot at stake. An example released by Medica in its "Facility Pricing Catalog" shows a patient paying $900 for a hernia repair at a favored hospital, versus $2,010 at a lower-ranked hospital.

The plans are promoted as a cost-saver for employers, who pay the majority of health care insurance premiums. Medica is predicting employer savings of up to 12 percent. The UnitedHealth Performance program has signed up DaimlerChrysler AG and UPS Inc. And, starting last month, 7,081 GM workers in six states switched to the plan, said GM spokeswoman Carey Osmundson.

DaimlerChrysler assembler Michael Beasley said the day after he got his packet explaining the switch to the UnitedHealth plan, he turned on the television to see that BJC HealthCare was dropping its ties to UnitedHealth.

"It was just a shock," he said. Many of the doctors Beasley's family uses are affiliated with BJC. He said the family has stayed with his son's pediatrician, who is on UnitedHealth's preferred list, but had to drop specialists at Washington University's medical school because they were not.

"I know so many people that have had to switch doctors, whether it was their doctor or their kids' doctor," he said.

In creating its program, UnitedHealth sorted through claims and survey data to rank doctors and facilities for cost and quality. Health plans use that data to offer different levels of insurance depending on how the doctor ranks, said Dr. Lewis Sandy, executive vice president of clinical strategy at UnitedHealthcare, a unit of UnitedHealth Group. Sandy stressed the quality-ranking component of the plan, although he acknowledged that some doctors are excluded because of cost.

Some doctors are questioning insurers' methods in creating their rankings.

UnitedHealth's analysis uses billing records instead of medical records, making the data inherently inaccurate, said Dr. Al Eldendary, president of the St. Louis Metropolitan Medical Society, where several health care providers have led a revolt against the UnitedHealth program.

"We support pay-for-performance programs. We support quality initiatives," he said. "Unfortunately we feel that this is not a quality initiative."

He said he was ranked as a Performance doctor, but a partner in his gynecological oncology practice wasn't. That means that if he's not on call when one of his patients needs a doctor, she'll have to see his partner -- and pay more.

With employers desperate to slow the rise in health care costs, such programs may become more common. A survey of employers by consulting firm Hewitt Associates found that 6 percent of employers were using a multitiered network or planned to add one this year. Another 40 percent were considering it.

"There's absolutely employer demand for physician profiles, for tiering," said Tom Beauregard, a health consultant at Hewitt.

"It's not real common yet. But I think that's the direction that things are headed in," said Max Reiboldt, chief executive of the Coker Group health consultants in Atlanta.

Blue Cross of California found it's tough to steer patients to cheaper hospitals. For a while, it put little price tags next to hospital listings on its Web site -- four price tags for the expensive hospitals, one for the cheap ones. Many patients pay a percentage of their treatment cost, so Blue Cross figured they'd want to use the cheaper hospitals, if only they knew which ones cost less.

They didn't. Blue Cross gave up and took the price tags off the Web site.

"It's very hard to change people's behavior, even when you give them the tools," said Blue Cross spokesman Michael Chee. "One way or the other, the industry is moving toward ways to create that transparency."

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On the Net:

UnitedHealth Group: www.unitedhealthgroup.com

Medica Health Plans: http://www.medica.com

Blue Cross Blue Shield of Minnesota: http://www.bluecrossmn.com

Blue Cross of California: http://www.bluecrossca.com

St. Louis Metropolitan Medical Society: http://www.slmms.org

Hewitt Associates: http://www.hewitt.com