- Keith Hovan, president of Massachusetts-based hospital system Southcoast Health, is alleging that the local Blue Cross Blue Shield plan is putting its own financial gain before patients as the two work toward negotiating reimbursement rates before Jan. 1, according to a letter he penned in a local news outlet.
- Hovan warns that without a deal residents' in-network access to the system is threatened. Southcoast operates four hospitals and outpatient facilities that cater to southeastern Massachusetts and Rhode Island residents.
- "We need BCBSMA to engage in meaningful negotiations that result in a timely, fair and equitable solution," Hovan said in his letter, which ran Monday.
Hovan's letter takes on the state's largest private insurer.
"Unfortunately, our concern at this time is that BCBSMA seems to be putting their revenues before our patients," Hovan said in the letter that appeared in the Sippican Week.
Blue Cross Blue Shield of Massachusetts holds about 42% of the state's commercial market, totaling about 2 million members, according to the Center for Health Information and Analysis.
"While we greatly value the care that the Southcoast Health System provides to our members, on behalf of our customers we simply cannot agree to price increases of almost 30% over four years," Jay McQuaide, spokesman for BCBSMA, told Healthcare Dive. McQuaide said the payer is disappointed to see Southcoast take this issue to the public. About 14,000 BCBSMA customers have a Southcoast Health doctor as their primary care physician.
Southcoast is a nonprofit community health system that generated revenue of $814 million and income of about $51 million for the year ended Sept. 30, 2017, according to its latest IRS filings.
It appears Southcoast has few competitors in the New Bedford and Fall River region, Southcoast's primary service area, according to a map of hospital systems maintained by the state's health and hospital association.
On average, Southcoast's patients have higher health risk scores compared with patients at other health systems throughout the state, and Southcoast patients live in ZIP codes with the lowest average household income ($61,679), according to Massachusetts Health Policy Commission's annual report on healthcare cost trends in the state.
Hovan argued Southcoast has made numerous investments in the region so residents don't have to leave the area to seek care, referencing two cancer centers. "Our community and clinical investments more than justify that we be reimbursed equitably with comparable community health systems in the Commonwealth," he wrote.
Over the years, insurers and health systems have attempted to out-leverage each other by bulking up in size and scale.
Most notably in recent years, CVS acquired health insurer Aetna and has morphed into a healthcare behemoth that now operates a health plan and pharmacy benefit manager all under one umbrella. Cigna acquired Express Scripts in a similar move.
Meanwhile, health systems have continued buying up practices and other systems to form super-regions. For example, Advocate Health Care in Illinois merged with Wisconsin-based Aurora Health to form one of the nation's largest health systems with 27 hospitals, 70,000 employees and $11 billion in combined revenue.