Blue Cross: Lab and radiology drive high outpatient costs; repricing model could cut $99 million for six hospitals

Summary

Blue Cross Blue Shield of Vermont told the Health & Welfare Committee that outpatient hospital services—particularly lab and radiology—are the main drivers of the state's higher-than-average per-member costs and that repricing those services could lower outpatient spend for six prospective-payment hospitals by about $99 million (roughly 20%).

James Morrow (transcript also lists James Moore), chief data officer, Blue Cross Blue Shield of Vermont, told the Senate Health & Welfare Committee that Blue Health Intelligence analytics show Vermont’s plan-level costs are substantially higher than regional and national averages.

“Blue Cross Blue Shield comes in at $10.17 per member per month,” Morrow said, while New England’s age-and-gender–adjusted average rises to about $7.62 and the national average is roughly $6.65. He said those demographic adjustments do not fully explain the gap.

Morrow and colleagues walked the committee through a service-category breakdown that identifies outpatient hospital services as the largest outlier. “Outpatient is about double the regional average,” Morrow said, citing roughly $4.32 per member per month in Vermont versus about $2.10 regionally. Within outpatient, he singled out medications, radiology and lab services as the highest-cost, fastest-growing components.

At the hospital- and…

Blue Cross: Lab and radiology drive high outpatient costs; repricing model could cut $99 million for six hospitals

Summary

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