Blue Cross and Blue Shield of Louisiana and the parent group of Our Lady of the Lake hospital are going directly to residents in their war-of-words over a new contract beginning Feb. 1. Both sent out mailings recently in the disagreement over whether Franciscan Missionaries of Our Lady Health System doctors and hospitals would stay in the Blue Cross network. Blue Cross says in its mailing that the health insurer keeps 2 cents of every premium dollar for emergency reserves. It says 14 cents of each dollar goes to in-house salaries, other operating costs and taxes, while 84 cents goes toward physician services and hospital costs. On the other hand, the insurer says 55 cents of each dollar it pays to OLOL goes toward customer medical expenses, while 30 cents goes to subsidize Medicaid, Medicare and uninsured patients, and 15 cents goes to charitable work and other spending.
“The bottom line on these negotiations is, they are by far the highest-paid hospital system in the state, and they want more and they can’t justify why,” says Mike Reitz, CEO for Blue Cross and Blue Shield of Louisiana. “We’ve been meeting for months and months and months to understand their cost structure. There is no justification that’s been delivered at this point.” Scott Wester, president and CEO of OLOL, says the reality of health care financing is that the insured pay to cover the cost of the uninsured and those who aren’t fully insured, and that both Blue Cross and Franciscan realize the system needs to change. “In today’s environment, that’s how health care financing works,” he says. Read the full story here.—Todd R. Brown
