Are we talking Los Angeles here and not Boston?  I say that as similar contracts with negotiating contracts and prices have occurredimage there as well with Blue Cross leading the pack to discourage patients monetarily from going to the 5 highest priced hospitals in Boston.  All the action today is going on with subsidiaries with insurance companies and it has been for quite a while and thus so I call some of these posts “subsidiary watch” as I have been doing for the last 2-3 years.  I think this post I made a couple weeks ago with the title pretty much sums us the health insurance contract business.

Aren’t These Health Insurance Contracts a Bitch!  Battle of the Algorithms

Here’s a couple more examples with Blue Cross and some of the other government contacts that are disputed, changed or what ever.  It goes on and on.  So the city employees under this Blue Cross Plan no longer can go to Cedars or UCLA and some will have to change doctors. 

Blue Cross Protesting Award of Texas Employee Retirement Health Plan to United Healthcare–Price Cut by $25 Million With Little or No Out of Network Coverage for Members

State of Louisiana Rejects United Healthcare’s Protest Over Awarding Blue Cross/Blue Shield Contract To Manage State Employee Health Insurance–Battle of the Insurance Algorithms Continues..

With this happening here with Blue Cross one does wonder if others will follow suit in their negotiations like what is occurring in Los Angeles and Boston.  If you didn’t read last week about the Blue Cross subsidiary acquisitions and want to be really confused on how some of this works, check in here. 

Blue Cross though for all purposes is under a technology attack of algorithms and contracts though with United Healthcare all over the US and I keep reading about it.   imageSo what does that mean?  Well both facilities are using Epic Medical records system which has a great reputation and does a good job.  Ok so now lets look at some subsidiary action with United Healthcare…they get a piece of the action almost everywhere any  more.  Oops looks like Blue Cross could be lacking a subsidiary company that does clearinghouse and revenue cycling and may have to outsource it or another 3rd party company comes in for that so while this does not make any difference today, what’s the future with contracts on the next one?

You can read below where United (Optum) created a new subsidiary to do clearinghouse services….and guess what the touted EHR system is, Epic.  Now I don’t know how these complicated contracts are negotiated but I know when I worked for Fortune 500 companies in sales we were encouraged to promote other sister companies and as a sale person who negotiated contracts I was able to give a bigger discount to bring in other subsidiaries. 

I don’t know how United works but that was my experience and what I had to sell years ago with a big company that had a few subsidiaries.  So it all comes down to bottom line money spent so maybe it’s a good question to ponder when it comes to competition as the complexities of insurance contracts grow? 

OptumInsight (A Wholly Owned Subsidiary of United HealthCare Optum Division) Creates Medical Clearinghouse Integrated With Epic Practice Management Software-Subsidiary Watch

So theoretically is this a bargaining point with promoting using other companies the overall corporate company owns?  It makes one kind of think about it.  Again Blue Cross has the contract and it is removing the two medical facilities but what’s the competition doing to get in the door in preparation for when the next time a contract comes up?  You have to look today at who owns who and where they operate and what kind of Health IT services they offer. 

Subsidiary Watch-Corporate Conglomerate Insurers Reduce Compensation Contracts Using One Subsidiary Then Market Same MDs With Another Subsidiary in Health IT

When the contract comes up again will competitors be in a spot to where they could include Cedars and UCLA?  This is just sales strategy projections to ponder.  Like I said imagethese insurance contracts are a bitch and the next contract negotiation may be one to watch.  For right now the city employees are SOL for Cedars and UCLA with Blue Cross but those who have Kaiser don’t have to worry as that’s a separate contract and they have everything under one roof.  Anthem's Select network excludes the doctor’s groups too so perhaps Cedars and UCLA will be back talking as Blue Shield did a while back?

To be fair though to UCLA though to they have a mix of a lot of Medicaid and Medicare patients and those revenues we know are lower and many hospitals depend on the commercial insurers to make up the difference in such demographic spreads and UCLA provides some medical services and treatments that you can’t get elsewhere so when a referral goes to UCLA it’s a good probability it’s a specialist’s specialist to be seen by the patient.   A company in the OC was already quoted with not honoring UCLA or Cedars with via an employer plan with United.  BD

Two of the most prestigious names in Southern California healthcare — Cedars-Sinai and UCLA — are getting shut out of a major insurance plan for being too expensive.

In a bold cost-cutting move, Anthem Blue Cross has eliminated doctors affiliated with the hospitals from a health plan offered to about 60,000 employees and dependents at the cash-strapped city of Los Angeles.

The city opted for Anthem's plan because it will save $7.6 million in annual premiums next year by excluding physicians from the two institutions known for tending to the Southland's rich and famous. About 2,200 city workers and family members are expected to lose access to their doctors under the plan.,0,4069159,full.story


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