BCBSletter

August 23, 2007

Shannon Stansbury

Division Vice President - Facility Network Management

BlueCross BlueShield of Texas

901 South Central Expressway

North Building , C

Richardson, Texas 75080

RE: BlueCompare for Hospitals

Dear Shannon:

Thank you so much for taking the time Tuesday to talk with our team about your plans for launching BlueCompare for Hospitals. We appreciate your giving us the opportunity to preview the reports before they were provided to all general acute- care hospitals this week.

As we discussed on Tuesday, THA's overall impression of the BlueCompare initiative is favorable. As you know, THA has supported pricing and quality transparency initiatives through the Texas PricePoint Web site and mandatory reporting of health care-associated infections.

We are pleased that the weighting of the measures underlying the BlueCompare designations has been modified to reduce the emphasis on hospitals' reporting of information to Leapfrog. As mentioned in our meeting, the Leapfrog measures are most meaningful when applied to very large hospitals. Small community hospitals and rural hospitals are at a disadvantage when rated on ICU physician staffing and adoption of computerized physician order entry.

THA requests that the methodology for assigning the BlueQ Ribbon performance be modified. All hospitals, not just those in the top 25 percent, should have the opportunity to move up and earn the dark blue ribbon signifying that the hospital exceeds expected performance. If the purpose of BlueCompare is to “collaborate with hospitals, physicians and other providers to improve healthcare outcomes and cost,” the methodology should allow for all hospitals to have the opportunity to achieve high performance status. Lacking the opportunity to improve their rankings, hospitals will perceive the reports as solely a mechanism for Blue Cross to discriminate in contract negotiations. Although it may not be possible to make this change before the October launch, we are asking for a commitment from you to make this change before the next report update. Without this change, it is unlikely that THA will be able to continue to favorably support this endeavor.

Hospitals also have concerns about the affordability designation. We understand that the average contracted rate for all inpatients was case-mix adjusted and that hospitals then were compared geographically and placed into percentiles. THA believes that the affordability designation would provide more meaningful information for consumers if the designation was specific to the reason for admission (i.e., delivery, bypass surgery, total knee replacement). Consumers need cost information related to the specific services that they are seeking. Unless this change is put into effect, the affordability designation will be misleading to the consumer. Again, without this change, it will be difficult for THA to favorably support the affordability designation.

In the spirit of transparency, THA also recommends that the scoring methodology and definitions be made public. Hospitals that aspire to a higher performance designation will need more detailed information to identify the areas of performance that need to be improved.

Research shows that hospital performance is improving rapidly, especially on the CMS process measures. For that reason hospitals encourage BlueCross to update the data on the Hospital Comparison Tool and BlueCompare as more current data becomes available.

Our staff will be happy to work with you on enhancements to BlueCompare, either through the THA/Blue Cross Blue Shield Hospital Executive Advisory Council or THA’s Policy Committees. Thank you again for taking the time to answer our questions.

Sincerely,