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December 8, 1994

Blue Cross proposal raises ire of some staff, faculty; HealthAmerica to submit counter proposal to Pitt

A proposal by Blue Cross to become Pitt's sole provider of employee health insurance has provoked a war of words among the following antagonists:

* Faculty and staff, including leaders of the University Senate and Staff Association Council (SAC), who oppose the Blue Cross plan's requirement that Pitt drop HealthAmerica — and who resent what they claim to be the Pitt administration's high-handed way of dealing with employee health care concerns recently.

* Pitt Business and Finance administrators who argue that they would be irresponsible not to consider a plan that, according to Blue Cross, would save Pitt $5 million annually during a 42-month agreement period. Since Blue Cross submitted its unsolicited proposal last month, Pitt's administration has stated repeatedly that no decision has been made on the proposal and that faculty and staff will be consulted before any decision is reached.

* HealthAmerica officials, who contend that Blue Cross's attempt to monopolize health insurance at Pitt is part of a regional strategy to drive rivals out of business.

* Blue Cross officials, who say they aren't out to stifle competition but, rather, to gain sole provider status in order to more accurately estimate insurance costs for particular employers and offer them lower premiums.

Faculty Assembly discussed the Blue Cross proposal Dec. 6, strongly condemning Blue Cross as well as Pitt administrators.

The issue is expected to be discussed at the meetings of at least four other groups this month: the Medical Rates and Program Review Committee, a group of staff, faculty and administrators who advise the senior administration on health care benefits issues (the committee meets today, Dec. 8); the Board of Trustees' Executive Committee, which is scheduled to hear a report on the Blue Cross proposal from Ben J. Tuchi, senior vice chancellor for Business and Finance, during a non-public meeting (Dec. 9); Senate Council (Dec. 12) and SAC (Dec. 14).

Meanwhile, HealthAmerica is planning to submit to Pitt its own unsolicited counter proposal to the Blue Cross plan.

Darlene Lewis, Pitt associate vice chancellor for Human Resources, said the University welcomed HealthAmerica's bid but made it clear that Pitt cannot give sole provider status to any company that excludes University-affiliated physicians.

"We have 1,500 physicians who are faculty at this University, who are affiliated with Presby (Presbyterian University Hospital), and who are excluded from HealthAmerica," Lewis said.

HealthAmerica officials said their proposal will offer Pitt three options, including giving HealthAmerica sole provider status. But Mike Blackwood, president and chief executive officer of HealthAmerica, said: "We're willing to be one of the players and can still present enormous savings to the University. Or, we're willing to continue as we have been as an HMO (health maintenance organization) option." HealthAmerica does not employ Presby doctors because the hospital's rates are the highest in western Pennsylvania, he added.

Blackwood said it would be "unfair" to describe Health-America's plan before Pitt officials have had a chance to study it. "Let's just say that our proposal is going to be comparable to what Blue Cross put on the table," he said.

Exactly what Blue Cross has put on the table isn't known yet because the company won't submit its detailed proposal until mid-December, according to Associate Vice Chancellor Lewis. "At this point, all we have is an outline from them," Lewis said. "Basically, they're saying to us, 'You give us the volume and we'll give you the discount.'" Blue Cross of Western Pennsylvania is referring media questions about the Pitt proposal to the company's senior vice president of sales and service, who was unavailable for interviews this week. But a Blue Cross public relations official said Blue Cross policy forbids its employees from publicly discussing proposals before the proposals have been accepted.

University Senate President James Holland and SAC President Darlene Harris (both of whom serve on the Medical Rates and Program Review Committee) say they are skeptical that Blue Cross can keep its promise of multi-million dollar savings to Pitt without either absorbing short-term losses — in the long-term interest of gaining a monopoly — or hiking the University's premiums in future years above what Blue Cross could get away with if a competing insurer were still on campus.

Associate Vice Chancellor Lewis said: "At the end of the proposed three-and-a-half year agreement period (with Blue Cross), we could go back to the marketplace again and solicit bids from HealthAmerica or U.S. Health Care or whoever" if Blue Cross tries to jack up its rates unreasonably.

Holland and Harris argue that, even if Blue Cross's plan is fiscally sound, it would seriously disrupt the health care of current HealthAmerica members. Of the 5,100 University employees and their spouses and children who subscribe to HealthAmerica, most would be forced to change their primary care doctors if Pitt accepts the Blue Cross monopoly. (The four Blue Cross options offered at Pitt enroll 10,385 employees, spouses and children.) Lewis said: "Obviously, this is not purely a numbers game. We realize that this (Blue Cross proposal) would represent a disruption in people's lives." On the other hand, Lewis said, saving the University millions of dollars could help preserve existing jobs, benefits and services.

"Continuing care is another one of our concerns," Lewis added. "We want to make sure that people in the middle of (medical) treatments can continue receiving those treatments. We've brought that issue up to both Blue Cross and HealthAmerica." SAC President Harris said "there's not a chance" that SAC or the staff representatives on the Medical Rates and Program Review Committee will endorse the Blue Cross proposal. Staff throughout the University have sent her letters and e-mail and have telephoned to protest the plan, Harris said.

Holland told Faculty Assembly this week that he has received about 30 letters from faculty who oppose eliminating Health-America. That's compared with the one or two letters he usually receives from faculty on even "hot" campus issues, he said.

Holland was among the dozen or so Assembly members who spoke out against Blue Cross and Pitt's administration at this week's meeting. Among other complaints, faculty said they were not adequately consulted about the Blue Cross proposal or about health insurance rate changes for 1995.

In an interview, Lewis said she shared the Blue Cross proposal with the medical rates committees on Nov. 1, just two working days after Pitt received it. Senate Council discussed the proposal at its Nov. 9 meeting, she noted. But Holland said the Blue Cross proposal came to the University community's attention so quickly only because he ignored the administration's request not to discuss the issue publicly.

Commenting at this week's Faculty Assembly meeting on the administration's alleged lack of consultation with faculty, Phil Wion said: "I think those of us who are on Senate Council should let the (administrative) people responsible know loud and clear that this is unacceptable behavior. It is totally uncollegial and a very serious backward step for the institution in relations between faculty and the administration." At the Nov. 9 Senate Council meeting, Council voted to require Human Resources to conduct a survey of employee satisfaction with Blue Cross and HealthAmerica. Lewis of Human Resources said last week that the survey will be folded into an ongoing survey of employee benefits.

"Probably about 5 percent of Oakland campus employees will be surveyed either through written surveys or as members of focus groups," Lewis said. Regional campus faculty and staff also will be surveyed, she added.

Senate President Holland called that plan inadequate and said the Senate may conduct its own survey of faculty opinions.

Lewis emphasized that, contrary to criticism and rumors, Pitt has made no decisions regarding the Blue Cross and HealthAmerica proposals. "I want to be clear about this: Nothing, nothing, has been decided yet," she said.

Lewis said that, at today's medical review committee meeting, she plans to distribute copies of a proposed schedule for University governance groups to review the Blue Cross proposal this winter. "The target is to make a final recommendation to the chancellor by the end of March," she said.

Beginning July 1, Pitt's health care enrollment year will be linked to the University's fiscal year instead of the calendar year. If either the Blue Cross or the HealthAmerica plan is accepted by Pitt, it would not go into effect until July 1.

For more detailed opinions of the Blue Cross proposal, see page 2.

— Bruce Steele

Filed under: Feature,Volume 27 Issue 8

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