Beth Israel also trying for new contract with Blue Cross

Beth Israel Deaconess Medical Center Paul Levy praises Tufts Medical Center for its "gutsy move" in trying to get more money from Blue Cross/Blue Shield, discusses how his hospital is also trying to negotiate a new contract with the insurer, one that gets Beth Israel more money in exchange for a "capitated" payment system in which Blue Cross pays a set amount per patient regardless of how long his or her stay is:

... One key issue is that such a plan transfers a portion of the insurance risk of health care to the providers and away from the insurance company. Some element of this risk-sharing is probably essential to align incentives between the providers and the insurer, but the specific design and implementation plan is important, lest the hospital and doctors find themselves with a major revenue loss at the end of any given year. After all, providers do not have the kind of financial reserves that insurance companies have. ...