The battle between Blue Cross and Blue Shield of Maryland and the state medical society over a physician fee cut is a microcosm of the fundamental changes taking place in American health care.
Last week, state Insurance Commissioner Dwight K. Bartlett III infuriated many doctors by approving the insurer's plan, which slashes specialists' fees as much as 24 percent. Fees paid to primary care doctors will increase, but the specialists' cuts are so deep that Blue Cross and its customers are expected to net $45.6 million a year in savings under the new payment system.
Blue Cross, the state's largest health insurer, says it will use the savings to pay for subscriber premium decreases that the company put into effect in anticipation of a favorable decision by Mr. Bartlett. But Dr. Howard Siegel of the state medical society maintains that Blue Cross will go for higher profits -- not health care.
This fight was a mere skirmish in a nationwide battle between doctors and insurers over an ever-shrinking health care pie. But the consumer seems to have been forgotten in this battle over money, power and control of the nation's multibillion-dollar health care industry.
For example, neither the Blues nor the physicians embarked on public relations campaigns aimed at winning Marylanders' hearts and minds. Thus, they both missed the opportunity to educate and win over the very people they are supposed to be serving.
The Blues have had significant managerial problems over the past decade. While it appears that the corporate ship is being righted, the company's recent actions raise important questions. The Blues' plan to sell stock was rejected by the state insurance commissioner two months ago. Now the insurer is trying to persuade state legislative leaders to push a bill allowing it to operate as a for-profit company. Simultaneously, the Blues contend they can improve their competitive position vs. other managed care plans by substantially cutting the fees paid to many physicians.
The Blues have yet to demonstrate how the savings and capital will improve the quality of medical care for consumers, other than to make vague references to new kinds of insurance products and more competitive managed care plans. The Blues owe their subscribers more detailed plans and models to show how new funds will improve or expand consumer services, including covering individuals who cannot be insured elsewhere. Lawmakers, taxpayers and subscribers must be assured that the Blues' ventures will not again lead to poorly planned, unprofitable businesses that are unrelated to the company's core mission of health insurance.
Opposite the Blues we see the state medical society wringing its hands -- and in its fantasies, Blue Cross' corporate neck -- over the fee cut. The physicians presented data and analysis to the insurance commissioner to complain about the effect of the fee cut on their incomes and, in passing, to claim that the fee cut might harm consumers. They even went so far as to claim that the fee cut will force physicians to leave the Blues -- or even the state.
And just where will the doctors go? Competing health plans are not going to be much more generous, and the environment for physicians is not much friendlier elsewhere in the country. It is doubtful that Maryland physicians will flee to places where managed care is dominant, like California, Minnesota and Massachusetts. The power of insurers to dictate the rules of medicine is widespread, and managed care is prevalent. The Blues' fee cut is much less likely to frustrate Maryland physicians than is their growing political isolation and the growth of managed care plans.
Aggressive managed care companies -- many of which are exactly the kind of for-profit entity that the Maryland Blues long to be -- are inexorably changing market dynamics and controlling the way physicians practice medicine. Unfortunately, physicians are mishandling their public policy battle with insurers. By casting the debate in terms of lost income and diminished job opportunities, rather than positioning themselves as the chief advocates for consumers who could be hurt by unthinking corporate medicine, physicians are losing their leadership position. They are, in effect, ceding power to nonclinical managers who will write the rules and dictate terms.
Neither physicians nor the Blues understand that consumers are angry at them both and trust neither. Physicians, in particular, seem incapable of building alliances with consumer groups that also are anxious about the growing power of insurers. In a health care system as complicated as ours, consumers need to believe that their physician is their advocate and is concerned, first and foremost, that the consumer get compassionate, appropriate, cost-effective health care.