August 16, 2008 - Bye-Bye Blue Cross?

I came across this disheartening news item in the paper yesterday:

Horizon Blue Cross Blue Shield seeks for-profit status
by Dunstan McNichol
Newark Star-Ledger
Friday August 15, 2008

“The massive Horizon Blue Cross Blue Shield of New Jersey health insurer today formally applied to become a for-profit company, a move the insurer's executives say will generate $1 billion for insurance assistance in New Jersey.

Blue Cross Blue Shield, which covers 3.6 million New Jerseyans, is seeking permission to convert to for-profit status under terms of a 2001 state law that authorized such transactions.

William J. Marino, the company's president and CEO, said the conversion will not affect premiums.

‘Our Board of Directors has decided to reconsider conversion at this time because our nation's health care system is undergoing a rapid transformation,’ Marino said in a statement announcing the application. ‘As the state's oldest and largest health insurer, we have an obligation to our more than 3.6 million members to be prepared to meet their needs as our health care system changes.’

Under terms of the state conversion law, 100 percent of the proceeds of the Blue Cross conversion would have to be dedicated to expanding access to affordable health care, Marino said in his statement.

Marino said Blue Cross Blue Shield would enjoy a greater ability to borrow funds and invest in new technology as a private entity.

The company has operated as a not-for-profit insurer for more than 75 years.”

My initial reaction is, WHAT are they thinking????!!!?

It’s becoming apparent to more and more people in this country that the private sector has failed massively in its efforts to maintain a working healthcare system. Greed has trumped patient care at every turn. Now, just as we seem poised to move in the opposite direction – towards more nonprofit- and government-managed healthcare – Horizon Blue Cross/Blue Shield is talking about meeting the rest of the country as it passes them coming the other way. Go figure.

It makes no sense – except to the high rollers who would become shareholders of the new, for-profit entity. Sure, there would be a short-term windfall of a billion dollars that the State of New Jersey – if its leaders have any wisdom at all – would apply towards meeting the medical costs of the uninsured. Yet, the day would come soon enough when that money is all spent, and the customers of Horizon Blue Cross/Blue Shield would end up holding the bag. The empty bag.

Remember, every dollar of shareholder profit is a dollar that can’t be used to provide healthcare. Over time, that would have a massive, detrimental effect on the quality of care.

I sincerely hope the New Jersey Legislature will act to block this proposal, as they have once before. It sounds like a very bad idea.

It makes me grateful that Horizon is not my medical insurer. The Presbyterian Church (U.S.A.) uses Highmark Blue Cross/Blue Shield (based in western Pennsylvania) to manage its ministers’ medical insurance. Most of my bills go to Horizon first, though, before they begin their journey out of state. I’ve had plenty of problems with bills Horizon initially rejected because they don’t have me in their database as one of their insured. After this had happened a few times, you’d think they’d have set up a little forwarding order that would remind their people, “Hey, this guy’s bill should be forwarded to Highmark.” But, no. The Horizon people find it easier to shrug and say, “Not my problem,” before stamping the bill “Return to sender.”

It’s bad enough the non-profit Horizon executives squander money on exorbitant salaries for themselves and on an advertising blimp. Just think of what damage for-profit executives might do.