December 1, 2009
We are writing with important information about Franciscan Missionaries of Our Lady Health System and our current Blue Cross Blue Shield of Louisiana negotiations. These negotiations are for a new contract that covers care we provide at Our Lady of the Lake Regional Medical Center, St. Elizabeth Hospital, St. Francis Medical Center, Our Lady of Lourdes Regional Medical Center, our employed physicians and certain affiliated entities.
The new contract must be in place by February 1, 2010. We have exchanged proposals with Blue Cross, but to-date have not reached a new agreement. Several months ago we asked Blue Cross to work with us to get this contract done early and we remain committed to completing the new contract in December.
We have asked Blue Cross for a single digit increase to our rates – a modest adjustment that accounts for medical inflation driven by technology and innovation, care for the uninsured, and underpayments from Medicare and Medicaid. Medicare and Medicaid pay as little as 60% to 70% of our costs, leaving a significant gap that must be closed through cost controls, process improvement, and contracts with private payors. The situation is far from perfect, but it is the reality of our current healthcare system.
Fair payment from all private payors helps ensure we can continue to provide the high quality clinical care our patients expect. Fair payment from Blue Cross is even more critical given its dominant market share in the state and, in turn, greater responsibility to the community. In return, our hospitals and doctors must be good stewards of our resources and operate as efficiently as possible without ever sacrificing quality. You deserve our best. We also provide critical services not found at other hospitals. Reasonable contracts protect our ability to sustain this vital level of care.
You may not be aware that nationally premiums have increased significantly for a decade while payments to hospitals and physicians from big health plans like Blue Cross have only grown at a fraction of the pace. In fact, a Kaiser Family Foundation study shows that premiums have gone up 131% in the past 10 years – more than a third higher than hospital costs. Based on the growth in Blue Cross reserves and its historic profitability, we believe Blue Cross can pay us fairly without raising your premiums.
You and many people in our community rely on our hospital and physicians and we do not want your access to be disrupted. We continue to work toward reaching agreement with Blue Cross in order to have a new contract in place by February 1, 2010. At the same time, we want you to be prepared in case the negotiations don’t progress. We are keenly aware of the anxiety caused by contentious and public disagreement between providers and payors and will do all we can to prevent that rancor.
We will be sure to keep you updated as discussions continue. If you have any questions or concerns, please don’t hesitate to contact us by phone at 225-922-7494. We appreciate your support as we work through this situation.
Sincerely,
John J. Finan
President & CEO
FMOL Health System
K. Scott Wester
CEO
Our Lady of the Lake Regional Medical Center
