Blue Cross and Blue Shield of Kansas City (Mo.) has dropped two hospitals from its larger managed-care plans, citing a need to trim its network. The move further hardens the lines drawn between competing healthcare alliances in the Kansas City metropolitan area.
As of Aug. 1, the Blues will eliminate Saint Joseph Health Center, Kansas City, Mo., sponsored by the Sisters of Saint Joseph of Carondelet, and Bethany Medical Center in Kansas City, Kan., from some of its plans.
Leigh Elmore, a Blues spokesman, said, "We have embarked on a long-range examination and evaluation of all our networks, both institutional and professional, with the intention of winnowing them down over time."
Blue Cross and Blue Shield of Kansas City is distinct from Blue Cross and Blue Shield of Missouri, based in St. Louis, and Blue Cross and Blue Shield of Kansas, based in Topeka. It has its own exclusive territory in western Missouri and eastern Kansas.
Over the past several years, the Kansas City Blues plan has developed strong ties to Health Midwest, a large hospital and healthcare consortium that is the market leader in the Kansas City area. Blue Cross is building its new data processing center on Health Midwest's flagship hospital campus, and the two are equity partners in a for-profit HMO called Blue Advantage.
Saint Joseph, Bethany and other independent hospitals are trying to form a new consortium called Mid-AmericaHealthcare networks
Health First. It would also include Saint Luke's Hospital, Kansas City, Mo.; Shawnee Mission Medical Center, Shawnee, Kan.; and four other hospitals (See related story, this page.)
Health Midwest spokesman Dennis McClatchey said, "It was a decision to make the (Blues') networks smaller and therefore more cost-effective. It was largely driven by price.
"It was not something we did, but certainly we benefit from it. Our good relationship with Blue Cross and our willingness to give it good prices didn't hurt us. But it was not a Health Midwest-directed strategy."
Mike Abell, chief executive officer of Saint Joseph, doubted that version of events. "Business is business. In this particular market, alignments have been drawn. The alignments are clearly Health Midwest."
Saint Joseph will lose some 400 inpatient stays and about $4 million in revenues annually. The Blues will maintain two smaller managed-care products at Saint Joseph, but Abell said he doesn't expect much of a future relationship with the insurer.
Some healthcare executives in the Kansas City area expect the Blues eventually to drop the other member hospitals in Mid-America Health First from its plans. However, James W. Boyle, CEO of Shawnee Mission, said that he had met recently with Blues executives, and nothing in the conversation had given him any reason to believe his hospital would soon be dropped.
Abell said he is particularly bothered by the fact that Saint Joseph and other hospitals bailed out the Blues in the late 1980s. When the insurer sustained major losses and was in danger of failing, Saint Joseph lent it money and gave it large cash grants to keep it afloat, Abell said.