You may have read a recent Commercial Appeal opinion column, “Why Methodist Le Bonheur Should Negotiate Lower Health Care Rate with Blue Cross.” The guest column said if Methodist Le Bonheur Healthcare (MLH) does not agree to lower rates, most of our facilities will fall out of network in January. In the piece, Blue Cross accused MLH of charging significantly higher rates than others in the area. There are always two sides to every story.
Here are three things they didn’t tell you:
First: Blue Cross Blue Shield of Tennessee (BCBST) sent a letter to MLH on August 31 notifying us of their intent to terminate our contract unless we reduce rates by 41 percent. The only justification of their demand was a desire to be more competitive in the market. Despite our best attempts to negotiate, including offering a 19% discount, BCBST would not engage.
They failed to appreciate that MLH was the only hospital that chose to remain in all quadrants of the community to ensure every individual has access to great care, regardless of their ability to pay. In 2021 we provided more than $200 million in uncompensated care while BCBST reported profits of more than half a billion dollars.
Instead of BCBST working with us in good faith to avert needless anxiety, their approach was to send letters to families notifying them of the change, creating confusion and unrest over the holidays. Families finally emerging from pandemic-related worry and disruption must now face concerns over their healthcare needs. This is unacceptable.
This is a playbook that BCBST and affiliated entities have repeated across the country to shift blame to providers in the hope of engendering public outcry.
More:Opinion: Big Insurance introduces a Big Mess in Tennessee
Second: They failed to inform you that Memphis is a narrow network market. That means that payers like Cigna, United Health and Blue Cross negotiate provider rates based on covered lives, working together to reduce cost while improving quality. Discounts are based on these outcomes. Our records of cost efficiency and quality are well known, MLH Memphis hospitals earned Medicare’s coveted 4-star rating. Methodist Olive Branch earned a best-in-class 5 Stars. Full Star Rating details are at https://www.medicare.gov/care-compare/.
Another public rating agency, The Leapfrog Group’s Hospital Safety Grades released this October confirm our high standard for patient safety and quality, with Methodist University, Methodist North and Methodist Germantown earning A grades, and Methodist South a B. Historical results for patient safety can be viewed at https://ratings.leapfroggroup.org/ .
More:Hospital safety: How did Memphis-area hospitals score in recent report?
While children’s hospitals do not receive hospital safety Grades or CMS star ratings, Le Bonheur Children’s Hospital is the only U.S. News & World Report regionally ranked children’s hospital in West Tennessee, and is nationally ranked in three specialties.
Our track record of high quality, safe care is why most major Memphis employers, including FedEx, International Paper, Shelby County Schools and AutoZone, chose to partner with our preferred providers, CIGNA, and United Healthcare. Together, we ensure that cost savings passed on to employers are passed to employees through lower premiums.
Third and final point: We offered BCBST a 19-percent discount to ensure their members continued access to care and requested a six-month extension of the current contract to alleviate the stress for patients during the holidays. This concession was made despite significant financial challenges faced by systems across the country from a combined impact of COVID, unprecedented labor shortages, inflation and supply chain disruptions. The American Hospital Association data show that between 2019 and 2021 hospital costs per patient grew 20%. Methodist absorbed those increases.
The Chattanooga Times Free Press reported that beyond BCBST’s $521 million after-tax net income in 2021, their accumulated reserves are $3.9 billion, $1.4 billion more than required by the state. Contrary to BCBST’s assertion of higher-than-normal costs, MLH fees for providing care are below national and state averages. You can view this data at https://www.medicare.gov/care-compare/
Serving the community for 104 years, MLH is committed to our mission to improve your health and well–being through compassionate, high-quality, and innovation care. We strive to improve every life we touch. We will continue to work with BCBST in hopes of reaching a resolution before year-end. Reach out to your human resources department and tell them that you want to remain in the MLH network by switching to CIGNA, United Healthcare or other payers that pass their savings to you.
Michael Ugwueke is the president and chief executive officer of Methodist Le Bonheur Healthcare.
