New Blues chief sets broad agenda

His cost-saving measures include electronic medical records

January 03, 2008|By M. William Salganik | M. William Salganik,Sun reporter

Designing new health insurance packages to cover the uninsured. Finding ways to reward doctors and hospitals for good and efficient care. Controlling medical costs. Building a secure system of electronic medical records.

Chester "Chet" Burrell, the new chief executive officer of CareFirst BlueCross BlueShield, is setting an ambitious agenda for himself and his company.

Burrell, who started on the job Dec. 1, has been busy in his first month, meeting with the political leaders, hospital executives and others who have had a sometimes contentious relationship with the state's largest health insurer over the past few years.

Part of his new job, clearly, has to do with maintaining CareFirst as a sound business. But Burrell said he is also motivated by CareFirst's distinctive role as a nonprofit.

"Yes, it's an insurance company, but it has a community mission," Burrell said in a recent interview. "We want to be catalytic for productive changes in the health system."

Burrell's embrace of CareFirst's role as a driver of change marks a new phase for the insurer.

The company, a nonprofit since it was created in 1937, created a furor when, under former chief executive William L. Jews, it tried to convert to for-profit status and sell itself for $1.3 billion, a deal that was blocked by state insurance regulators in 2003.

Angry legislators forced out a majority of the CareFirst board, and the new board rededicated itself to the nonprofit mission.

The board decided a year ago to replace Jews and selected Burrell as the new CEO in September.

"It's very refreshing for CareFirst to get re-engaged in terms of positive policy development, to re-establish its role as a policy entity with nonprofit values," said Calvin Pierson, president of the Maryland Hospital Association, who was a leading critic of CareFirst's efforts to become a for-profit company.

Burrell wants the insurer to inject ideas into discussions over how to cover more of the uninsured and how to manage care delivery to increase quality while controlling costs.

To cover the uninsured, CareFirst is "looking at creating model benefit offerings," policies that would not be as comprehensive as most of those now on the market, but would still offer reasonable coverage at a more moderate cost, Burrell said.

Burrell said that he is willing to use CareFirst's administrative capability and its market muscle - the ability to get discounted rates from doctors and other care providers - to help the state operate an affordable coverage program. CareFirst wouldn't look to make a profit on the operation, and might even subsidize it, he said.

CareFirst's interest in developing more affordable coverage is "very exciting news," said Vincent DeMarco, president of the Maryland Citizens' Health Initiative, an advocate of universal health insurance.

An expansion of Maryland's Medicaid program approved by the recent General Assembly special session would include only about a third of the state's 750,000 uninsured, leaving hundreds of thousands who still can't afford standard health coverage, DeMarco said.

Del. Peter A. Hammen, a Baltimore Democrat who heads the House Health and Government Operations Committee, said his panel met briefly with Burrell. The state is "most definitely" interested in finding ways to cover more people, Hammen said, but since he hadn't seen Burrell's plan, "the proof is in the pudding."

Burrell also has concepts for tackling health costs. He wants to reduce administrative costs by getting more doctors to submit bills electronically.

While the dollars can be significant for a company the size of CareFirst, which has 3.2 million members in Maryland, the District of Columbia and Northern Virginia, Burrell said the potential administrative savings will still represent only pennies on the health dollar. "The big dollars," he said, "are on the care side."

Immediately before coming to CareFirst, he was CEO of RealMed Corp., a company that adjudicates claims online among insurers, doctors and hospitals.

A secure electronic patient-record system would help avoid repetition of tests and assist in coordinating care. Burrell said he doesn't want CareFirst to house patient records, but that the company can advise providers and perhaps offer grants to help create a record system.

Beyond that, Burrell is looking for CareFirst to develop some form of "pay for performance" - a system that will reward doctors and hospitals for quality and efficiency.

Insurers until now have mostly tried to control costs directly - by requiring advance approval for expensive treatments or by managing high-cost cases and chronic diseases. But Burrell said he looks to hospitals and affiliated networks of doctors to coordinate care, especially for the most expensive patients, who often have multiple chronic conditions and visit a variety of specialists.

Pierson, from the hospital association, said that pay-for-performance, in some form, is "a trend whose time has come, and hospitals realize they need to embrace it."

Burrell said he's met with the heads of the largest hospital systems in the region, and they seem pleased with the idea that they, not insurers, should be coordinating care and making decisions.

"Eager is not a word that adequately describes it," he said.

bill.salganik@baltsun.com

Chester `Chet' Burrell

Age: 60.

New job: Chief executive officer, CareFirst BlueCross BlueShield

Work experience: Began as a health analyst and administrator in New York state. Former top executive of Blue Cross plans in New York and Indiana. Most recently, CEO of two medical technology companies.

Education: Allegheny College; master's in public administration, University at Albany, State University of New York

Family: Married, two adult children

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