WellPoint ties bonuses to patients' well-being

April 04, 2007|By Daniel Yi | Daniel Yi,Los Angeles Times

The nation's largest health insurer announced yesterday what is believed to be the country's first effort to tie the pay of its employees to the well-being of its consumers.

WellPoint Inc., with 34 million insured members nationwide, including nearly 8 million through its Blue Cross of California unit, will base part of its workers' annual bonuses on how well its consumers fare in things like immunization rates, cancer screenings and diabetes management.

Employees will be rewarded, for example, if they get more diabetic patients to undergo preventive care that might ward off blindness or limb amputations, common complications of the disease.

But consumer and physician groups were quick to warn that the program could be used to identify the sickest patients, so that their premiums could be raised or their coverage canceled. Blue Cross of California was recently fined by the state's Department of Managed Healthcare for illegally dumping individual policyholders after they became sick.

"It makes you wonder," said Arthur Levin, director of the nonprofit Center for Medical Consumers, a New York-based advocacy group. "Why are [WellPoint] employees being rewarded for doing the right thing in the first place? Shouldn't prevention be the standard of care, not something you reward?"

WellPoint has denied illegally canceling policyholders in California, and its officials maintained yesterday that the new reward program represents WellPoint's commitment to the health of its members.

"It is a good investment and it is the right investment to make," said Dr. Sam Nussbaum, WellPoint's chief medical officer. The program "will give us a new set of knowledge in the management of diseases."

The central component of WellPoint's new program is a "Member Health Index." The index is a formula that measures and tracks WellPoint members' overall health levels. The index is based on things such as how often members ended up in emergency rooms, how often they received preventive care like vaccination and cancer screenings, and whether they are taking needed medications, like cholesterol-lowering drugs.

In the front lines of the program are WellPoint's nearly 2,000 nurse consultants who are charged with tracking members' claims and talking to them about needed and available care. Starting with a baseline index, the company hopes to increase performance over time.

For example, out of WellPoint's 700,000 members who are diabetic, only about 15 percent receive all the preventive care and exams they should. The goal for the end of 2007 is to bring that number up to 20 percent, Nussbaum said.

If that goal is met as well as other, similar measures, every one of WellPoint's 42,000 employees will receive a bonus, the company said.

WellPoint officials declined to detail amounts, but the rewards based on members' health levels will account for 5 percent of performance-based bonuses the company pays each year.

Other performance measures include company profitability and membership growth.

Daniel Yi writes for the Los Angeles Times.

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