School health insurance consortium extends Highmark contract
June 3, 2016 12:00 AM
Highmark's sign atop their building,
By Steve Twedt / Pittsburgh Post-Gazette
The health insurance consortium representing 42,000 Pittsburgh-area teachers, other school employees and their dependents, has signed a five-year extension with Highmark to administer its health insurance plan, citing data it says shows UPMC hospitals are more costly and “not the highest quality.”
Jan Klein, an Allegheny County School Health Insurance Consortium trustee and director of business for the Mt. Lebanon School District, said it was not a matter of siding with one side or the other in the Highmark-UPMC battle for patients.
“We used data to determine what’s most cost effective for us.”
On the quality side, Ms. Klein said the consortium looked at rankings by Comparion Medical Analytics of Greenville, S.C., which analyzes data from the Centers for Medicare and Medicaid Services and from QualityNet.org, formerly the Hospital Quality Alliance, a quality reporting mechanism established by CMS.
The rankings can be viewed online in the Spring 2016 issue of ACSHIC’s Community Healthy Magazine, www.acshic.com/, or on the Comparion website, www.carechex.com.
St. Clair Hospital in Mt. Lebanon came out on top for overall care in Comparion’s quality analysis while UPMC Presbyterian Shadyside had the lowest score based on indicators for 16 different hospital clinical services, including cardiac and cancer care, joint replacement and stroke care.
Others with high overall care quality scores included Washington Hospital, Allegheny Valley Hospital, Excela Health’s Frick Hospital, Monongahela Valley Hospital and Excela Health Westmoreland Hospital.
Allegheny General and West Penn hospitals received “average” overall quality ratings.
The lowest overall rankings after Presbyterian Shadyside went to Heritage Valley Beaver, UPMC Mercy and Ohio Valley General Hospital.
UPMC spokesman Paul Wood on Thursday took issue the Comparion analysis, saying the it “uses a flawed and statistically questionable methodology that renders meaningless and misleading comparisons,” whereas the annual U.S. News and World Report rankings “consistently recognize UPMC in the top 1 percent of the 5,600 hospitals nationwide.”
Stephen Foreman, an associate professor of health care administration at Robert Morris University, said any attempt to evaluate quality can produce different results depending on how the evaluation is done.
A Johns Hopkins study last year looked at four national rating systems, including U.S. News and World Report, and found that no hospital got a “high performer” ranking in all four and fewer than five U.S. hospitals made three of the four lists. The study did not name the hospitals.
Evaluating quality of care “is a black art, to say the least,” Mr. Foreman said. “At the end of the day, the real truth is that you can’t measure it very well.”
Costs invite clearer comparisons.
The self-insured ACSHIC pays its own claims and Ms. Klein said the bills showed Presbyterian Shadyside was its highest cost hospital.
For the 12 months beginning October 2013, ACSHIC covered 362 admissions to UPMC Presbyterian Shadyside, where patients received 31,000 services at a cost of more than $15 million.
During the same period, 293 consortium members were admitted to St. Clair, where they received 33,000 services for less than $5 million. At Allegheny General Hospital, which is a Level 1 adult trauma center like Presby, there were 159 admissions, 31,000 services rendered and the bill was $5.7 million.
High-end services that might be available only at Presbyterian Shadyside did not explain the difference, Ms. Klein said, as that level of care overall represented only about $6 million of the consortium’s annual $220 million in medical costs.
The consortium did expect a somewhat higher bill at Presbyterian Shadyside because there were more admissions, she said, but “that doesn’t account for the $10 million difference. What it does account for is that Presby is a very high cost hospital.”
RMU’s Mr. Foreman agreed. “With the price difference that high, I’d want to see Presby better on every quality rating.”
Denying members affordable access?
Mr. Wood at UPMC, though, believes area educators are missing out on an opportunity to take advantage of a highly competitive insurance market here.
“ACSHIC’s decision to deny its members affordable access to UPMC physicians and hospitals by awarding a no-bid contract to Highmark [is] particularly unfortunate.”
Ms. Klein adamantly disagreed. “We have absolutely taken advantage of the competitive market to provide affordable, quality care to our members. It just includes them at a slightly higher price.”
The consortium is not required to get other bids, and even at discounted rates UPMC hospitals were unaffordable, she said.
The consortium announced that it was staying with Highmark two years ago, just as the lines of separation between UPMC and Highmark were hardening. “When this battle first began, we heard from the teachers that, ‘You have to have UPMC at any cost,’” Ms. Klein acknowledged.
The consortium board opted instead for Highmark’s Community Blue Flex plan, a tiered product that gives some access to UPMC physicians and facilities (at least until the 2019 expiration of the UPMC-Highmark consent decree) but also comes with higher out-of-pocket costs for its members.
“What we’re saying is, ‘If you go to an independent hospital or an AHN (Highmark-affiliated Allegheny Health Network) hospital, you’re almost cost free,” Ms. Klein said. “If you’re admitted, there is no deductible, there is no cost for lab work, zero cost to see your primary care physician and a low co-pay to see a specialist.”
She noted that the decision to extend the Highmark agreement was made by the ACSHIC board whose membership is made up of half management and half labor representatives. “If labor didn’t agree with this, it would not have happened.”
Still early in the post-UPMC period
It’s still early in the post-UPMC run, but there are indications of a shift at the consortium: During the January-March period of 2014, Ms. Klein said the consortium paid UPMC $3.8 million for 8,564 services at Presbyterian Shadyside.
For the same period in 2015, it paid $1.7 million for 3,400 services.
“People started switching because of the cost,” Ms. Klein said.
ACSHIC administers health insurance for more than 40 public school districts in the seven-county region plus charter schools, vocational schools and community colleges in Allegheny, Beaver and Butler counties (exceptions include Pittsburgh city schools and the North Allegheny School District).
It is Highmark’s largest self-insured group customer within the Pennsylvania Public Education Market and one of its top 15 customers overall.
For its part, UPMC’s insurance services has steadily gained enrollment as its medical membership rolls swelled by nearly 150,000 to 1.16 million in the 12 months ending March 31.
“The most revealing test for determining whether a health care provider is providing high quality care at an affordable price is always patient choice,” Mr. Wood said. “In Allegheny County, 60 percent of patients choose to receive their care at UPMC.”
Steve Twedt: email@example.com or 412-263-1963.
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