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Broker Guide
Blue Shield Spotlight

New Plan Designs Expected to Reduce Cost of Health Care

Did you know that the United States leads the world in healthcare spending as a percentage of Gross Domestic Product (GDP)? At $2.2 trillion, or 16.5 percent of GDP, the 2006 U.S. National Health Expenditures (NHE) dwarf other major sectors of the economy -- and they are projected to represent as much as 20 percent of GDP by 2015.1

Hospital, physician, and pharmaceutical costs continue to account for more than 60 percent of the nation's overall healthcare spending. Furthermore over the past four years, total spending in each category of the NHE has increased.2 Most economists note that spending at this magnitude is not sustainable.

At Blue Shield we are committed to improving healthcare, accessibility, and affordability. We believe carriers should provide you and your clients with innovative solutions that optimize cost, quality and the value of benefits while meeting corporate and workforce needs.

Plan Solutions
Two recent Blue Shield product offerings support this belief: Access+ HMO® SaveNetSM provides three popular HMO benefit plans tied to a smaller physician network, and our new generics focused drug plans provide thirty new benefit choices to promote generic and formulary brand utilization including several plans with $0 copayments for generic drugs.

Access+ HMO SaveNet, available to Southern California employer groups with 51+ eligible employees, can reduce employer's healthcare rates by up to 14 percent depending on their profile and how many of their employees choose the SaveNet plan over the standard HMO plan.

$0 generic copay drug plans encourage the increased use of generic medications to offset the upward trend of prescription drug costs. A one percent rise in generic drug use could save .48 pmpm, resulting in savings and lower out-of-pocket expenses for members.

"Employer groups want to provide their employees with healthcare benefits, but the rising cost of coverage may put pressure on them to reduce benefits or raise employee rates. We developed these solutions so employers have more options to choose the plan that best meets their needs and their budget," says Chuck Larsen, Director of Large Group Product.

"With the number of total prescriptions dispensed in the U.S. continuing to rise from 3,200 million in 2001 to 3,646 million in 20053 and the number of generic drug applications more than doubling in the same period4, increased use of generic medications could have a significant impact on Blue Shield's overall prescription drug usage and costs," adds Larsen.

The Food and Drug Administration (FDA) requires generic drugs to be as safe and effective as their brand-name counterparts, and generic medications can cost anywhere from 50 to 70 percent less. In 2006, the Blue Shield average allowed amount for a one-month supply of a brand-name drug was about $117 and a generic, about $17.

"Our goal is to deliver savings without compromising quality. When members use generic drugs, everyone wins," says Phyllis Simon, Pharmacy Communications Manager.

Healthcare costs should be a national priority, with all carriers doing their part to keep costs affordable. Products such as SaveNet and generics focused drug plans support Blue Shield's mission to provide access to quality coverage at an affordable rate.

For more information on Blue Shield solutions, contact your sales representative.

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"Quality Plus" Distinction for Blue Shield of California

The National Committee for Quality Assurance (NCQA) recognized Blue Shield of California with the "Quality Plus" Distinction for its early adoption of Physician and Hospital Quality (Q+PHQ) measures.

Blue Shield has participated in collaborative hospital and medical group quality programs since 2003. Our transparency strategy is essential in working with our providers (hospitals and physicians), creating incentive-based products and programs, and making quality information transparent to our members. This award recognizes Blue Shield of California as being at the forefront of hospital and medical group transparency.

Out of 50 national plans, Blue Shield of California was one of four plans awarded the "Quality Plus" Distinction for both Member Connections and Physician and Hospital Quality, as evaluated by the NCQA:

  • Member Connections (MEM)
    Do members have access to interactive information? Can they track claims? How functional is the plan's Web site? Does the plan take advantage of available technology to provide good service? Can members engage in a health risk appraisal?
  • Physician and Hospital Quality (PHQ)
    Does the plan regularly measure and report on the performance of network doctors and hospitals? Does the plan disclose how it uses that data? Does the plan work with physicians and hospitals to share and seek information? Are physicians given financial rewards for delivering high-quality care? Do members have incentives to select high-quality physicians? Does the plan participate in a collaborative measurement initiative with other plans or support physician-initiated measurement activities?

Blue Shield of California is also accredited with an "Excellent" NCQA status for its HMO and POS products, the highest possible accreditation levels plans can achieve.

We're driving industry change toward improved quality care by providing clear information about physicians and hospitals, making it easier for providers to improve the quality of care and for members to make important healthcare decisions for themselves and their families.

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1 World Health Organization (2006), Bureau of Economic Analysis (2006) and Centers for Medicare and Medicaid Services (2006)
2 Adapted from Centers for Medicare and Medicaid Services (2006)
3 IMS Health, IMS National Prescription Audit, May 3, 2006
4 Food and Drug Administration, Center for Drug Evaluation and Research (2006)
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