University Times

In a Feb. 3 vote, most of the members of a Pitt advisory committee on health benefits rejected a proposal to eliminate HealthAmerica and give Blue Cross a monopoly on employee medical insurance here.

The Medical Review Committee was asked to select among three options for the future of Blue Cross and HealthAmerica at Pitt. The result:

* 6 committee members voted to retain Blue Cross and HealthAmerica but freeze enrollments in the latter.

* 5 voted for the status quo — keeping Blue Cross and HealthAmerica and continuing to accept new members in both.

* 4 voted to drop HealthAmerica, making Blue Cross the sole provider of employee health insurance at Pitt.

The vote will be part of a package of recommendations, resolutions and survey results that will be sent to Chancellor J. Dennis O'Connor in late March regarding Blue Cross and HealthAmerica, said Darlene Lewis, Pitt associate vice chancellor for Human Resources.

The chancellor and the Board of Trustees will make the final decision on any benefits changes for the fiscal year that begins July 1.

The Medical Review Committee's vote may figure significantly in the decision. The group, made up of faculty, staff and administrators, is advisory only. But it includes leaders of the University Senate and the Staff Association Council, representatives of Pitt's Health Sciences schools, and the heads of Human Resources for Pitt and the University of Pittsburgh Medical Center (UPMC).

Pitt's administration assigned the committee to evaluate a series of medical insurance proposals, beginning with Blue Cross's unsolicited bid in November to become Pitt's sole health insurer. The deal would require Pitt to eliminate HealthAmerica in exchange for millions of dollars in promised savings on the University's Blue Cross premiums.

In December, Health-America made a counterproposal. Blue Cross followed up with its own counterproposal to HealthAmerica's. Finally, last month, both companies re-wrote their proposals to meet criteria set by the Medical Review Committee.

Pitt's administration insisted that the committee continue to consider the option of a Blue Cross monopoly, but rejected a comparable proposal from HealthAmerica.

Four of the Medical Review Committee's 15 members are from the Health Sciences, including pharmacy school Dean Randy Juhl and three faculty members. According to University Senate President James Holland, the four were pressured by UPMC administrators to vote in favor of a Blue Cross monopoly.

"There was a lot of arm-twisting," Holland told Council Feb. 13. "I don't think it influenced the voting, but it made doing the voting a lot more painful." Gordon MacLeod, a professor in the Graduate School of Public Health, agreed that he and the other Health Sciences representatives on the committee came under pressure from UPMC to vote for eliminating HealthAmerica. MacLeod said a medical center official pointedly reminded him during a committee meeting how much money UPMC provides to the public health school each year. "The way it was said, it was obviously an attempt at intimidation," MacLeod said. "That was just a small example of the kind of pressure we were under." Another faculty member on the committee, whose research depends on graduate students paid by UPMC, was threatened with the loss of that funding should the medical center be forced to make further budget cuts — a not-too-subtle way of telling her to vote for a Blue Cross monopoly, according to MacLeod and Holland.

Holland praised Associate Vice Chancellor Lewis for insisting on a secret ballot, despite calls by UPMC Human Resources Director Sid Seligman for members to declare how they were voting. Lewis "held strong on this point — maybe, one might easily imagine, at personal risk on her part," Holland said at the Feb. 7 Faculty Assembly meeting.

UPMC officials point out that the medical center gives the Health Sciences schools over $100 million per year in direct support, which makes UPMC hospitals more expensive than community hospitals with no academic responsibility. Because of the medical center's high rates, HealthAmerica has avoided referring patients to UPMC facilities whenever possible. UPMC's administration contends that Pitt fringe benefits funds should not go to companies like Health-America that exclude University facilities.

HealthAmerica recently offered to allow its Pitt enrollees to begin using UPMC doctors within the HealthAmerica physicians network, but UPMC rejected the offer. (See Feb. 2 University Times.) In addition to Health-America's avoidance of UPMC hospitals, there is bad blood between the two organizations over a pair of lawsuits that resulted from UPMC's buyout of Montefiore University Hospital in 1989.

UPMC charged Health-America with breach of contract for transferring its relationship with Montefiore to West Penn Hospital at the time of the buyout. A countersuit by HealthAmerica argued that the company's contract with Montefiore was canceled when the hospital became part of UPMC. Both sides dropped their lawsuits last fall when Health-America's parent company agreed to buy back, for $50 million, the stock that UPMC had acquired in the parent company when UPMC absorbed Montefiore.

As part of the settlement, HealthAmerica made an undisclosed payment to compensate the University for incidents of overbilling that Pitt uncovered. Pitt General Counsel Lewis Popper said the overbilling amounted to millions of dollars.

Another University official, speaking on condition of anonymity, said the past incidents of overbilling by HealthAmerica have contributed to the hostility and distrust that some University administrators feel toward HealthAmerica.

Human Resources estimates that Pitt would save $655,000 next year by freezing HealthAmerica enrollments and $2.3 million by dropping HealthAmerica entirely.

Opponents of a Blue Cross monopoly question the estimates, pointing out that HealthAmerica premiums have been declining in recent years. They also warn that Blue Cross could jack up its rates several years from now if it no longer faces competition here from a rival insurer.

Monopoly opponents note that, while HealthAmerica avoids using Presbyterian University Hospital, it does not exclude Pitt medical faculty. For example, HealthAmerica does business with Children's and Magee- Womens hospitals, where many Pitt medical faculty practice. And according to Holland, about 65 percent of physicians in the UPMC-affiliated University Health Network also belong to HealthAmerica's physicians network.

The Senate president also reported at this month's Faculty Assembly meeting that about 40 percent of Pitt employees' Blue Cross claims last year involved non-UPMC hospitals.

At this week's Senate Council meeting, United Faculty President Mark Ginsburg presented Holland and Chancellor O'Connor with copies of petitions opposing any health insurance monopoly at Pitt. Ginsburg said 1,200 staff and faculty members at all five campuses signed the petitions during the last three weeks.

— Bruce Steele