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Stanford and Blue Shield of California Can't Agree on Price -- Patients Lose

Original post made by Bob Wenzlau, Crescent Park, on May 12, 2008

Perhaps other "Blue Shield" members received the same letter this weekend:

"For many years, Blue Shield of California has contracted with Lucile Packard Children's Medical Group, Menlo Park Medical Group and Stanford Health Clinics. However the contracts ... have been terminated."

Our patient-doctor relationship has "ended" because they can't agree on a price. Perhaps it is trivial for them, but this is scary, expensive and tedious to have to deal with these fallouts. What fun it is to talk to an insurer and learn your options.

There is no tone of remorse in the letter from Blue Shield, and no statement from Stanford at all. In classic insurance speak, they inform us in a letter dated May 7th, that the insurance ended April 26th -- a lucky patient that uses the services after the insurance ends.

The recourse is disappointing. We are advised that we can use the "out of network rate". When one looks at out of network rates, the medical center can gouge the patient that is not paying through an insurance carrier. I have observed that Stanford might bill $1,000 for a procedure, only to accept $200 from the insurer. I anticipate the true fee is somewhere between, but as a patient out of network we are obliged to pay whatever the clinics desire.

Oh....if I could wave my magic wand... I would ask that the insurers and Stanford remember their "falling out" has people in the mix. I would ask them to remember that these falling outs damage patient doctor relationships. I would ask them to remember that consumers of medicine have fewer choices, and that they should strive to find the middle ground.

I share this because Palo Alto is bending over backwards as a community to allow Stanford's expansion of medical services. Their failure to see some duty to the community when they "buck" a deal with a major insurer is unfortunate. The free market certainly is not looking out for us. The patients, and perhaps the community are the losers here.

Comments (10)

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Posted by MidtownMom
a resident of Midtown
on May 12, 2008 at 6:59 pm

Nothing new - its a game between the insurance companies and medical providers. A few years ago Atena and Sutter (PAMF) did not agree on the price - each one thought they were justified in their own way.


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Posted by Peter
a resident of another community
on May 12, 2008 at 7:19 pm

Ah, the blessed "free" market. It will solve everything, according to some, it just might take some time and leave some colateral damage. Us.


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Posted by Fred Balin
a resident of College Terrace
on May 12, 2008 at 9:18 pm

I received the letter on Saturday. It was addressed to me rather than my wife (the primary on the plan) so it may have gone out just to people who recently visited one of the three health-care providers.

"Menlo Park Medical Group" refers to the Menlo Clinic as per my wife's confirmation call to the clinic.

MidtownMon may be right. I called my agent first thing this morning. He described it as posturing on the part of Blue Shield. He called back later in the day to say that from his sources an agreement is close, Hope he's right.


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Posted by Mary
a resident of Green Acres
on May 12, 2008 at 11:20 pm

End private health insurance by government fiat. Appropriate private insurance assets, and start over.


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Posted by just take it all
a resident of Midtown
on May 16, 2008 at 10:04 am

Mary, while you are at it, nationalize everything else, too.

Oh wait, that has been tried for hundreds of millions of people over the last 100 years on almost every continent, and it fails every time.

Failure: defined...causes MORE poverty and misery.

The latest to go that route Chavez in Venezuela..go try living there.


 +   Like this comment
Posted by Bob Wenzlau
a resident of Crescent Park
on May 17, 2008 at 11:55 am

Bob Wenzlau is a registered user.

The discussion reminds me of John McCain's view of the world in 2013 when he has all the problems solved -- war is no more, we have a new world government and likely global warming is resolved. The comments of ending private health care insurance are so outside the realm of feasibility that we will only enjoy them the day we arrive in Shangri-La. My own interest is more modest, one of tweaking or adjusting what we have rather than throwing it out.

Though Palo Alto can't move health care too much, sometimes local attention influences and local tactics can move a national issue. Perhaps if there were more community transparency on local health care delivery, we would demonstrate more community interest.

Major changes in health care delivery, such as insurers dropping a regional health care delivery system, should warrant local news coverage. This coverage might start a stronger local dialog, and ultimately lead to more responsive consideration of health contract issues between Stanford, Blue Shield and the community they serve. They enjoy that their constituency is isolated, and don't have to factor their interest into decisions.


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Posted by Mike
a resident of another community
on May 20, 2008 at 1:15 pm

Keep in mind if Blue Shield agrees to higher rates, they will merely pass it along in the form of higher premiums.


 +   Like this comment
Posted by ABlueShieldCustomer
a resident of Los Altos
on May 30, 2008 at 2:33 pm

I received an updated policy from Blue Shield recently, and it showed a rate increase. I checked on the site for providers, and Stanford is restored as a preferred provider.


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Posted by Linda
a resident of Palo Alto Hills
on Jun 12, 2008 at 6:32 am

I think it is important to remember that Hospitals, Insurance Carriers, doctors, drug companies, insurance brokers, Medical supply companies, hospital administrators, etc all play a part in this.

I read that Stanford is a very profitable hospital and that their fees from insurance companies are nearly the highest in the state. Perhaps rightly so? I know we all have when our premiums go up every year for insurance..

I don't have the answers, I wish I did, but I don't necessarily blame Blue Shield or Stanford...



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Posted by Solon
a resident of Professorville
on Jul 4, 2008 at 2:33 pm

First of all, this often happens and is a sign of a good negotiation. Second, usually most everyone winds up "covered" (that is, reimbursed per contract" regardless of these negotiations as they are usually resolved.

Anybody have a relevant experience in this time frame?

Free market is working in hospital, doctor, drug contracted reimbursement plans (other wise know as "health" insurance, which of course there is no such thing)

Profit, and the ure of profit drives investment.
Investment creates competition, lowering prices by lowering costs through management, innovation, technology and so on.
Fair competition is helped by advertising to encourage consumer choice, truthful information; published data on outcomes and prices; and other information.

Role of government is minimal regulation for safetyand integrity of cl;aims, data.

Insurance companies shoud be free to cover o r not cover any procedure they want, consumers should be free to buy or not buy policies.

Actual costs and "prices" are not even really known or certain for the majority of the "charges" on your bill.

Could we actually watch a meeting whre these "prices" are set?

"Take Care of Yourself"tm, use little care, go to the doctor seldom, realize the majority of everything you are told and done to you is probably not true or necessary, and most of the rest is unproven;

yet ii is also true it is a wonderful care system, great results are obtained in remarkablle cases, some advances are real, and clear, and useful, and I admire greatly the women and men of medicine.


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