BY MORGAN CHILSON
Kansas Reflector
TOPEKA — Blue Cross and Blue Shield of Kansas and Topeka’s St. Francis hospital have failed to reach a contract agreement, leaving insurance customers out of network beginning Jan. 1 for one of Topeka’s major health care systems.
Officials with both organizations say discussions are ongoing. The current contract ends Dec. 31.
“We’re having productive talks,” said Matt All, president and CEO of BCBS of Kansas. “It’s a little complicated because they have an out-of-state owner, so we’re not just talking to people here on the ground.”
“I’m not in the business of making predictions, but our expectation is that we’ll work this out and that they’ll be in network,” he added.
Topeka’s St. Francis campus is owned by Ardent Health, which manages operations, and the University of Kansas Health System. Ardent is based in Brentwood, Tennessee.
People covered by BCBS of Kansas have been posting social media messages, upset about the possible loss of their doctors.
“I refuse to abandon my primary care provider whom I trust with my care, so Blue Cross Blue Shield just lost another customer,” said Topekan Carol Baldwin on her personal Facebook page.
In an emailed statement to Kansas Reflector, hospital officials said: “The University of Kansas Health System St. Francis Campus is committed to protecting access to high-quality care for our community. We have made repeated efforts to engage directly with senior decision-makers at Blue Cross and Blue Shield of Kansas and remain committed to negotiating in good faith to reach a fair resolution.”
Rising costs in health care are causing the challenge in reaching agreement, both sides said. For All, the discussions are indicative of broader problems throughout the health care system.
“We are seeking an agreement that reimburses St. Francis Campus at rates consistent with rising costs due to inflation and supply chain pressures,” the hospital’s statement said. “Equitable reimbursement rates are critical to supporting the high-quality care that our patients deserve.”
All said BCBS, which is a mutual nonprofit that is created to benefit its members, must negotiate so that reimbursements to the hospital are reasonable and don’t translate into premiums that members can’t afford.
“For the whole 19 years I’ve been with Blue Cross, and basically our whole history, we’ve had every hospital in our service area in network, and we want St. Francis in network,” he said.
Changes needed
There are many good things about the country’s health care, All said, but the availability of resources isn’t evenly spread out.
“We have too many people that can’t afford coverage,” All said. “The big problem in American health care that’s existed for as long as any of us have been thinking about this is that it doesn’t control costs very well, and so there’s this steady rise in costs over the decades, and some decades are faster than others.”
For the years 2024 through 2033, the Centers for Disease Control and Prevention predicts that national health expenditures will grow 5.8%.
“Across the industry, in every market, whether you’re talking about commercial plans, the public programs and so forth, costs are rising really quickly right now,” All said. “We’ve seen it in our plan and when you combine that with possibly losing some of the subsidies in the (Affordable Care Act) market, you’re going to have some consumers that are just going to be priced out of the market.”
“That should be unacceptable to us,” All added. “In 2025, in a nation as prosperous as ours, we should be able to make sure that everybody can afford good health care.”
The health care system needs a major overhaul, All said, but having what he called an “adult conversation” on the topic is difficult.
“We need to really talk about the root causes of higher costs and the toll that takes, but also the consequences of controlling costs, because there’s another side to this,” he said. “The fact that we’re able to have two beautiful hospitals in Topeka, two great hospitals in Wichita, a beautiful hospital in Lawrence, and you can actually go there and get care — that is partly because we fund our health care system really lavishly.”
But that system isn’t working if people don’t have access to it, All said.
“If we solve the cost problem, we can solve all of the other problems,” he said. “The other problems are just technical. At that point, we have to get the cost problem solved, and we just haven’t been willing to do it yet as a country.”
Health expenses
The Commonwealth Fund, a foundation that focuses on affordable health care, compared U.S. health care costs to those in 12 countries. It found the U.S. pays more for:
- Insurance administrative costs, responsible for about 15% of the excess costs.
- Administrative activities, 15% of excess.
- Prescription drugs, 10% of excess.
- Physician salaries, 10% of excess.
- Registered nurse salaries, 5% of excess.
- Investments in medical machinery and equipment, less than 5%.
The U.S. industry is highly concentrated, All said, with about 20% of health care dollars spent on 1% of the population and more than half of health care dollars on about 5% of the population. Those are patients with chronic diseases, people with metastatic cancer, babies born prematurely and others, he said.
“In some ways that makes it easier to address because you’re talking about a smaller set of the population, but I think it actually makes it much harder to address because these are people who very much need care, and we want them to have the best care that’s available,” he said. “So how do you make that less expensive? That is the conundrum that we face in American health care.”
It’s important to make sure healthy people are covered by insurance, which was the point of the ACA mandate that required everyone to have insurance, All said. That mandate was struck down but the ACA covers about one in every six people under age 65, or about 44 million people, according to KFF, which tracks health policies.
“If you only cover people who have the costliest care then, then they won’t be able to afford it at all. None of us could,” he said.
All said it’s frustrating to hear people against ACA subsidies say that “most people don’t use the care anyway.”
“You would never have auto insurance, for example, where only people who get into wrecks pay their auto premium,” he said.
All said smaller towns, in particular, could be in jeopardy of losing access to local health care services with Medicaid cuts and the possibility of ACA subsidies not being renewed.
Many Kansas hospitals are in difficult financial condition with rising costs. The Kansas Hospital Association said non-reimbursed care costs continue to rise for community hospitals. In 2023, the amount was over $26 billion, and since 2015 non-reimbursed care has increased by 77%.
All said insurance companies have a responsibility to be stewards of the health care industry and work to make sure care is affordable and available.
“I think there’s a lot of criticism that’s fair of the insurance industry, but it’s not really the reason why health care costs keep going up,” All said. “It is really because we have decided that we’re going to have a system that is really rich for some people and not so rich for others and unavailable for others. Until we make a real commitment to universal coverage that’s affordable, we’re going to be in this fix.”