Published October 2004

Premera: staying on top
of health-care needs
Dimensions system enables insurer to create
customized plans, adapt to new payment tools

By Kimberly Hilden
SCBJ Assistant Editor

Premera Blue Cross has a vision, and despite the headlines of the past two years, that vision is not centered on converting to a for-profit insurer; it is about enabling customers to better manage their own health care, company officials say.

“The vision of the organization is to really provide better choices and information for employers, clients and physicians,” said Scott Forslund, communications director for Premera.

In 2000, under the leadership of its new chief executive, H.R. Brereton “Gubby” Barlow, the Mountlake Terrace-based insurer set out to achieve just that, investing more than $100 million to develop an integrated computer system that would allow Premera to adapt to an evolving health-care environment.

“In the past, the traditional model was that you needed to have a PPO (preferred provider organization) plan and an HMO (health maintenance organization) plan,” Forslund said.

Under Premera’s old system, PPO and HMO products were running on separate computer systems, making it difficult for employers to customize health-care packages for their employees, Forslund said.

In 2001, the nonprofit organization, which serves more than 1.2 million people in Washington and Alaska, started meeting with physicians to design a new network structure. The next year, the first new benefit plans were finalized, and in January 2003, they were up and running.

Known as Dimensions, the suite of products and services brought with it a new approach to benefit design, enabling customers to decided which network design and cost options were best for them, with provider networks no longer tightly bundled with specific benefit plans, Forslund said. It also brought a new system of online services that allows members to check on claims and eligibility information in real time and at their own convenience.

Another of Dimensions’ components — a philosophy of “care facilitation” — provides support for Premera members wherever they are in the health-care spectrum, he said. There is an online health-information site that provides wellness information and personal risk assessments for those looking to prevent illness as well as disease management services, including voluntary education and support services for members with cancer, diabetes, heart disease and kidney disease, among others.

Such programs enable customers to take control of their health care and get the information they need so that they can work with their health-care provider for the best possible outcome, Forslund said.

The last of Dimensions’ four components is perhaps its most revolutionary, providing a new approach to provider networks that takes into account the cost efficiency, quality of care and customer satisfaction of clinics within their own market.

In the past couple of years, Premera has been working with leading health-care clinics to establish care measurements, using information generated from member claims as a starting point, Forslund said.

“We use apples to apples diagnoses, comparing similar severity diagnoses and looking at the overall efficiencies of one clinic compared to peer clinics,” Forslund said. “Using the power of that information, physicians can, if they wish, improve their own best practices.”

The insurer is providing incentives to improve quality of care, and is also working on a quality scorecard, to be published online later this year, he said, adding that “it’s something that the clinics want us to do.”

Since its rollout, the Dimensions line of products and services has been met with a strong, positive response from members, growing from an initial enrollment of about 160,000 to well over 650,000 members in just a year and a half, Forslund said.

“It gives the customer a lot more control,” he said, adding that Dimensions’ modular approach to health coverage easily adapts to new industry options.

In July, Premera proved Dimensions’ adaptability by introducing Personal Dimensions, a consumer-directed health plan that includes a high-deductible medical plan to be used in conjunction with one of three self- or employer-funded medical spending accounts — a health savings account, a flexible spending account or a health reimbursement account.

In announcing the new plan, Premera’s chief marketing executive, Heyward Donigan, noted that such a combination helps employers manage health-care costs while giving consumers greater control over their own health-care dollars.

“Consumer-directed health plan funding options offer members long-term solutions for health-care funding while helping them manage costs,” he said. “It’s all about bringing solutions to our customers.”

And it is all about a vision set forth four years ago during a meeting between Premera’s chief executive and company management: to provide better choices and information for members and physicians.

“That’s the path we set out on,” Forslund said. “... We have the capability to really do this well.”

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