Concerns raised about Blues' plan

January 14, 1995|By John Fairhall | John Fairhall,Sun Staff Writer

Cuts in doctors' fees proposed by Blue Cross and Blue Shield of Maryland would have a "severe impact" on the ability of the Johns Hopkins and University of Maryland health systems to provide free care to thousands of poor people, the institutions say.

The two Baltimore medical centers, which together provide an estimated one-third of the charity care in Maryland, say Blue Cross' proposal to reduce specialists' fees by as much as 25 percent adds to the pressure the centers already face to lower their costs.

A top Hopkins official, Assistant Medical School Dean Paul A. Hoffstein, urged the state insurance commissioner this week to delay action on the Blue Cross proposal until a gubernatorial commission can act. The commission is developing a system to guide how private insurance companies pay for physician services.

Mr. Hoffstein told the commissioner at a hearing on the Blue Cross proposal that fee reductions also would harm Hopkins' ability to fund medical education programs. He said yesterday in an interview that the Blue Cross proposal would cost Hopkins $2 million to $3 million a year.

Although he was out of town and didn't testify at the hearing, the dean of the University of Maryland School of Medicine, Dr. Donald E. Wilson, said he agreed with Mr. Hoffstein. "This will be harmful to us," he said, but didn't provide figures.

The two academic health centers are in an unusual position with respect to Blue Cross: Dr. Michael M. E. Johns, dean of the Hopkins medical school, and Dr. Morton I. Rapoport, president and chief executive of the University of Maryland Medical System, sit on the board of Blue Cross, the state's largest health insurer.

"There was not a conflict of interest," Dr. Johns said. "I think that the board knew there were going to be some cuts, but the technical detail of those cuts really wasn't put on the table for discussion. That was a management decision."

Blue Cross contends that it is now paying doctors more than other insurers and must cut costs in order to keep down premiums paid by employers and workers.

But many doctors told the insurance commissioner that the rate decreases were so drastic that some physicians would cancel their contracts with Blue Cross, forcing patients to find other doctors or to pay more from their own pockets for medical care.

Hopkins and the University of Maryland raise other concerns, notably the impact on their ability to provide care for uninsured and under-insured people. About 15 percent of Marylanders lack insurance; many more have limited medical benefits, which often are exhausted by serious illness.

While the Hopkins and University of Maryland hospitals are reimbursed for providing care to the poor, through a state hospital rate-setting system, their combined 1,500 physicians are not, Mr. Hoffstein and Dr. Wilson say.

Hopkins and the University of Maryland medical schools pay their doctors salaries, using funds from a variety of sources, including fees insurers pay for subscriber patients. Blue Cross' proposed fee cuts would shrink this source of income, making it harder for the academic health centers to pay salaries for doctors who teach and treat patients, according to Dr. Wilson and Mr. Hoffstein.

Dr. Wilson said academic health centers already are under pressure from insurers demanding lower prices for treating subscribers. Because Maryland law prohibits a hospital from discounting rates for particular insurers, the University of Maryland tries to meet insurers' demands by reducing physician rates.

"The pressure is enormous on us to discount our fees, and we do," Dr. Wilson said.

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