MA Blue Cross CEO says providers must control costs, or else

The Boston Globe, January 24, 2011
The chief executive of Blue Cross Blue Shield of Massachusetts, the state's largest health insurer, is calling on hospitals and doctors to step up efforts to contain healthcare costs, warning that those insisting on traditional fee-for-service contracts will face level or reduced payments from his company. Andrew Dreyfus, who took the helm at Blue Cross Blue Shield in August, last week sent a letter to more than 400 leaders of hospitals and physicians practices, applying pressure on them to switch to a global payment plan. Under such a system, medical care providers are put on an annual budget and given incentives to control costs and improve care instead of being paid for individual doctors visits and procedures. Dreyfus, who once worked in state government and for the Massachusetts Hospital Association, said Blue Cross Blue Shield will take a hard line in negotiations with hospitals and doctors that don't agree to accept global payments. "Fee-for-service payment rates cannot continue to rise if we are to meet the community's goal of affordable care,'' he wrote. "Ultimately, we must continue our work to identify ways to reduce the level of payments.''

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