An article in the
Washington Post this week addresses the continued misdirection of healthcare
dollars. The story indicates that the 10 top executives of the D.C. area’s
largest health insurer could collect $47.9 million in severance benefits if
local insurance regulators approve the purchase of nonprofit CareFirst BlueCross
BlueShield by for-profit WellPoint Health Networks Inc. The article went on to
note that “D.C. Council member Sharon Ambrose (D-Ward 6), who chairs the
committee that oversees both the merger and the District insurance commissioner,
said the severance packages would be a focus of discussion -- especially because
the council passed emergency legislation this summer requiring its approval.”
Ambrose also noted that "[w]hen you start telling people they may have to pay
17, 18 or 20 percent more for their health plan, and then you start talking
about severance packages of $14 million or $18 million, that starts looking like
Enron.” For the complete article please go to www.washingtonpost.com. 
A
recent AMED NEWS report sheds light on the Pennsylvania Blues’ practice of
maintaining significant cash reserves. These reserves are substantially higher
than reserves of other insurers and in some situations, two and three times
industry averages. The practice of maintaining such reserves is to the detriment
of both the insured and physicians according to many physician groups. The
article quoted Howard Richter, MD, president of the state medical society of
Pennsylvania, who testified at the public hearing. Dr. Richter noted that
“[i]deally, health insurers should have 30 to 60 days worth of expenses in
reserve. The physicians of Pennsylvania would like to have increased payments
for physicians and decreased premiums to patients. Any reserves that could be
used to safely do that would be of benefit to the commonwealth" he concluded.
The report noted that one of the Blues addressed in the report had reserves
sufficient for over 300 days. For the entire report please go to www.ama-assn.org.