The cost of care directly impacts what we charge members for coverage. Every year, we share details about our financial commitments and in 2021, we paid out well over $16 billion — a record high for our plan — to meet the care needs of our 3.3 million members.
Unlike Methodist Le Bonheur Healthcare and other providers, our profits are capped by law. And as a taxpaying not-for-profit, we are committed to doing only two things with those earnings:
- strengthening the reserves that protect our ability to serve our members, and
- improving or supporting our members’ access to high-quality, cost-effective care.
We’re required to hold a certain amount in reserve to cover our members’ health care claims in the event of a major disaster or crisis. That required amount rises every year along with the cost of health services, and last year it totaled $2.5 billion.
Here are some things to keep in mind about our efforts to lower costs for Tennesseans with a new agreement:
- Because BlueCross is a not-for-profit health plan, any savings from a new contract will go directly to lower costs for our members and employer customers in the form of lower premiums.
- The timeline of our negotiations is important.
- At the end of August, we notified Methodist of our intent to establish a new agreement by the end of the year that would help us meet our customers’ needs for affordable coverage. Despite our regular outreach and attempts to open discussions, Methodist took two months to formally acknowledge our communication.
- On Nov. 10, we received their initial proposal, which did not meet expectations for greater affordability, effectively maintaining a costly status quo for BlueCross members.
- On Friday, Dec. 9, only 21 days before the end of the current contract, we received their second offer. Their timing does not allow for meaningful conversations before the end of the year. BlueCross leaders continue to keep the lines of communication open and are making every effort to find a solution that works for all and avoid any member disruption.
- We are proud to work with providers, including Methodist Le Bonheur, to support quality and cost-effectiveness in health care. Eleven Memphis-area provider groups are part of BlueCross value-based care arrangements that reward and support high-quality, cost-effective health services. These groups have saved more than $15.7 million since 2017. Ultimately, savings like this support lower premiums for area members.
We’ve worked closely to support our provider partners and customers in Memphis and across the state throughout the COVID public health emergency. This included paying claims as quickly as possible and working with employer group customers to extend payment terms on request for those struggling to make payments as a result of COVID impacts. Our teams also streamlined, suspended or relaxed clinical and administrative policies where possible to help relieve pressure when hospital and clinical capacity became strained.
While Methodist has a number of impressive achievements, so do other providers in the area. For example, Baptist Memorial Hospital’s Memphis campus was named the city’s Best Hospital by U.S. News and World Report earlier this year and received Tennessee’s first American College of Cardiology accreditation for its cardiac catheterization lab.
- Methodist’s reported discount was designed to phase in over several years, a time period that fails to deliver the necessary savings to support cost-effective coverage for Tennessee customers.
We’ve been proud to partner with Methodist Le Bonheur Healthcare in the service of West Tennesseans for decades. We appreciate their track record of safe, effective care, and we look forward to reaching an agreement in the near future. But for that care to be accessible to members, costs must be lowered. A new contract will deliver millions in savings for our customers in the form of lower prices on coverage — a need which is more urgent than ever.
We hope Methodist will join us once again to do what is right for members and patients in the Memphis community.
It’s important to note that our members still have in-network access to care at Methodist through Dec. 31. And in an emergency, members should always go to the closest ER – even if it’s at a Methodist facility. We’re here to support our members impacted by this situation, and we’re ready to answer your questions – help is available by calling the number on the back of your member ID. You can also stay up to date on the status of our negotiations and learn more at bcbstnetworkupdates.com.