HCAs Tennessee Affiliated Hospitals

1
Maintaining Quality Care and Access for all
Tennesseans

• HCAs Tennessee Affiliated Hospitals

2
Basis for Negotiation

• HCAs Tennessee affiliated hospitals came to the
  negotiation seeking to cover the increased costs
  of hospital care
• BlueCross came to the negotiation struggling with
  successive years of double digit premium
  increases and indicated hospital rates were to
  blame

3
HCAs Request To BlueCross

• Is Far Below BlueCross Increases To Its Members

4
BlueCross Increases vs. HCA Increases
31
19
15
3
Data Unavailable
3
3.7
Source BlueCross BlueShield of Tennessee
Health Plan Affordability in Tennessee available
at www.BCBST.com. 2002 information not available.
5
HCAs Request To BlueCross

• Is Below The Hospital Consumer Price Index and
  BlueCross Stated Medical Cost Increase

6
Comparison of Cost Increases
12.0
9.3
9.0
HCA requested a 9 increase for 2003, which is
less than the Bureau of Labor Statistics (Oct
2002) statement that hospital CPI had increased
9.3 during 2001-2002, while BlueCross projects a
12 medical trend increase for 2003.
7
Six HCA Affiliated Hospitals

• Are Paid Less By BlueCross Commercial Plans Than
  Some TennCare Managed Care Organizations (MCOs)

8
Percentage of Billed Cost Paid by Health Care
Plans
9
The Tennessee Hospital Association

• THA, an Independent Third-Party, Provided its Own
  Audit of Costs and Payments Based on Data
  Supplied by Tennessee Hospitals
• THAs Data Stated HCAs Costs and Rates are
  Significantly Lower Than Peer Hospitals

10
HCA Expense/Day vs. Peer Expense/Day
1,510
1,421
1,357
1,264
1,116
1,144
Source Joint Annual Report of Hospitals
average total expense per adjusted day. Non-HCA
hospitals are defined as hospitals of similar
size and service in the same market.
11
HCA Revenue/Day vs. Peer Revenue Day
1,571
1,444
1,413
1,357
1,209
1,125
Source Joint Annual Report of Hospitals
average total revenue per adjusted day. Non-HCA
hospitals are defined as hospitals of similar
size and service in the same market.
12
BlueCross Then Changed its Stance by Stating

• The issue is that proposed rates for HCA
  hospitals are significantly higher than other
  peer hospitals.

13
Urban Hospital Differences
22,186
19,200
12,912
11,724
11,681
Revenue Per Discharge
9,951
3,266
2,695
Examples Used in this Source originated from
the BlueCross BlueShield of Tennessee website
www.BCBST.com.
14
Rural Hospital Differences
Revenue Per Discharge
Examples Used in this Source originated from
the BlueCross BlueShield of Tennessee website
www.BCBST.com.
15
BlueCross Then Admitted

• HCA prices per procedure showed relatively small
  increases year to year, but that utilization
  (number of procedures performed) needed to be
  better controlled.

16
BlueCross Website Statement

• Payments to HCA by BlueCross
• HCA prices per procedure showed relatively
• small increases year-to-year
• Total actual payments to HCA showed large
• increases each year because of
• -Utilization ( of procedures performed)
• -Mix (types of procedures performed, such
• as more expensive MRIs vs less
• expensive x-rays)
• HCA can influence those factors

17
Facts

• Hospitals dont order services physicians order
  services based on their determination of the
  patients needs.
• Any payment from BlueCross of Tennessee for
  services must meet the enrollees benefit design
  and BlueCross utilization management policies.

18
The BlueCross Decision

• To Eliminate 14 HCA Affiliated Hospitals has
  Dramatically Reduced its Members Access to Care.

19
Insurance Companies

• Distinguish themselves by their service and their
  provider network.
• A material change in an insurance companys
  network may result in individuals reevaluating
  their choice of insurance companies.

20
2,329 HCA Hospital Beds Are No Longer in
BlueCross Commercial Network

• Hospital City of Beds
• Centennial Medical Center Nashville 688
• East Ridge Hospital Chattanooga 128
• Grandview Medical Center Jasper 70
• Hendersonville Medical Center Hendersonville 110
• Horizon Medical Center Dickson 176
• NorthCrest Medical Center Springfield 109
• Parkridge Medical Center Chattanooga 300
• River Park Hospital McMinnville 127
• Skyline Medical Center Nashville 198
• Southern Hills Medical Center Nashville 160
• StoneCrest Medical Center Smyrna 75
• Summit Medical Center Nashville 188

21
Hospital Participation by Payor in Davidson County
Davidson County Aetna BCBS Cigna PHCS United
Baptist v v v v
v   Centennial Medical Center v No
v v v   Metropolitan Nashville General
No v v No No   Saint Thomas
v v v v v   Skyline Medical
Center v No v v
v   Southern Hills Medical Center v No
v v v   Summit Medical Center
v No v v v   Tennessee Christian
No v v v v   Vanderbilt Medical
Center v v v v v
22
Hospital Participation by Payor in Hamilton County
Hamilton County Aetna BCBS Cigna PHCS United John
Deere Cariten East Ridge v No
v v v v v   Erlanger
Medical Center v v v v v
v v   Memorial Hospital
v v v v v v
No   Parkridge Medical Center v No
v v v v v  
23
HCA Affiliated Hospitals are the Only Hospitals
in Four Tennessee Counties

• Dickson
• Marion

• Robertson
• Warren

24
Quality Care

• HCAs Tennessee hospitals are among
• Top 100 Hospitals Year-After-Year by HCIA-Sachs
• Top Three Spine Hospitals in the Country
• Top Spine Hospital in the Country by Case Volume
• Top 10 Percent of Hospitals in the U.S. for
  Number of Open Heart Surgeries Performed
• Tennessees Only Robotic Surgery Programs
• Chattanoogas Top Rated Hospital-Based
  Orthopaedic Program
• Largest Privately-Funded Community-Based Clinical
  Research Program in the Country
• Regions Only Chest Pain Network
• JCAHO Accredited

25
The Facts That Supported the Rate Request of HCA
Affiliated Hospitals Have Not Been Disputed by
BlueCross

• Nursing shortages, advances in technology, high
  cost pharmaceuticals, and hospital consumer price
  index (CPI) validate our request

26
What You Can Do

• Please contact your benefits manager or insurance
  agent if you have questions about maintaining
  access to your HCA affiliated community hospital
• Physician participation should not be affected by
  BlueCross decision to eliminate these hospitals
• This does not affect behavioral health providers

27
Maintaining Quality Care and Access for all
Tennesseans

• HCAs Tennessee Affiliated Hospitals