Blue Cross of California Pays out $28 Million in Physician Bonus Incentives; Top Performing Medical Groups Awarded Using New Quality of Care and Patient Satisfaction Criteria.

Business Editors/Health/Medical Writers

THOUSAND OAKS, Calif.--(BUSINESS WIRE)--Sept. 10, 2003

Blue Cross of California (Blue Cross) today announced its HMO Quality Scorecard award recipients based on revised incentives used in 2002. Eighty participating physician groups throughout the state qualified for an incentive pool of $28 million using the new Quality Scorecard requirements, which were implemented in July 2001. Hill Physicians Medical Group was identified as Blue Cross' top performing open-paneled physician group in Northern California, and St. Joseph Heritage Medical Group was the top performing open-paneled medical group in Southern California.

"We are very pleased to be able to recognize and reward physicians on the basis of delivering quality health care and patient service throughout the state," said Dr. Jeff Kamil, vice president and corporate medical director, Blue Cross of California. "The restructuring of our financial incentives has been well received by both consumers and physicians. We know that doctors who receive rewards for superior performance based on their clinical and patient satisfaction skills are more satisfied and have more appreciative patients."

In 2001, Blue Cross implemented a new Quality Scorecard for its HMO medical groups based on feedback from physician partners and the endorsement of its external Physician Relations Committee. The revised bonus evaluation process began monitoring physician groups for improving the quality of care given to HMO patients using health outcomes and patient satisfaction information from a number of clinical and service categories instead of on the basis of traditional cost controls and utilization management. The quality measures included such items as patient satisfaction surveys, waiting times for appointments, number of complaints and grievances, peer and staff reviews and patient turnover. Under the revised Quality Scorecard, more than half of a medical group's score is now based on clinical outcomes and patient satisfaction surveys.

"We are pleased to be Blue Cross' top performing medical group," said Steve McDermott, chief executive officer of Hill Physicians Medical Group. "Blue Cross has placed the focus where it belongs -- on quality of care and patient satisfaction. Medical groups and physicians are now better motivated and appropriately rewarded for giving the right care in the right place at the right time. It's programs like these that ultimately help achieve quality, cost-effective health care."

"An emphasis on rewarding medical groups for quality patient care, service and clinical outcomes has begun to change the culture of managed care in Southern California," observed Scott Smith, M.D., medical director, St. Joseph Heritage Medical Group. "Blue Cross' shift to these quality and service-based rewards programs will favorably impact the underlying goal of managed care -- to improve the overall health of our patients and community by putting quality first."

Blue Cross of California's revised Quality Scorecard has been implemented continuously since July 2001. As contracts are renegotiated with each medical group in its HMO network, their bonuses are tied to the new criteria. Out of a total 160 medical groups contracted with Blue Cross throughout the state, half of them were eligible under the new criteria while half of the groups were awarded bonuses based on the old criteria. The groups awarded bonuses under the old criteria drew on a total incentive pool of $3 million. Blue Cross anticipates all its physician groups will be accountable to the new bonus criteria by 2005.

Hill Physicians Medical Group, located in San Ramon, serves 350,000 members through a network of 2,000 physicians practicing in seven counties from Oakland to Sacramento. Its programs and physician roster can be found on the web at www.hillphysicians.com.

St. Joseph Heritage Medical Group is a primary care medical group of 35 physicians with three locations in central Orange County. Founded in 1964 as Yorba Park Medical Group, St. Joseph Heritage Medical Group changed its name in 1999 to better reflect its relationship with St. Joseph Heritage Healthcare and St. Joseph Hospital in Orange. Its programs and physician roster can be found on the web at www.sjhmg.org.

Blue Cross of California and its California affiliates, with more than 7 million medical members, is an operating subsidiary of WellPoint Health Networks Inc., one of the nation's largest publicly traded health care companies. WellPoint serves the health care needs of more than 13.3 million medical members and more than 49 million specialty members nationally. WellPoint offers a broad spectrum of quality network-based health products including open access PPO, POS and hybrid products, HMO and specialty products. Specialty products include pharmacy benefit management, dental, utilization management, vision, mental health, life and disability insurance, long term care insurance, flexible spending accounts, COBRA administration, and Medicare supplements. Blue Cross of California can be found on the web at www.bluecrossca.com. Blue Cross of California is an independent licensee of the Blue Cross Association.