Mooneyham column: Blue Cross fights as if for-profit

Thursday, November 05, 2009 5:21 PM  |  Printer friendly version | E-mail to a friend |

RALEIGH — Blue Cross Blue Shield of North Carolina finds itself in an interesting, precarious position.

The insurer isn't a for-profit, publicly-owned company. If it were, company execs might seek approval of a board of trustees representing shareholders' interests before going on an all-out offensive to try to kill national health care reform that includes a public plan to compete with private insurers.

Blue Cross is a nonprofit, and a somewhat unique nonprofit at that.

Plenty of nonprofits try to shape public policy and engage in lobbying. For some, that's their only purpose.

Most, though, are supported by grants, donations or membership dues. Typically, donors and/or members make up boards that direct policy.

Blue Cross differs from those nonprofits because its revenue comes from customers. It's a business nonprofit, and at least since the 1980s, has acted a lot like a privately held or publicly traded company.

For example, it pays its CEO, Bob Greczyn, $4 million dollars a year. His salary is ten fold that made by his predecessor, Ken Otis, fifteen years ago.

Blue Cross does have a 15-member board of directors, with Greczyn as the only company employee among the membership. Its purpose, who it serves, isn't immediately obvious.

For a lot of years, the people who directed Blue Cross did so with the idea of making health care available to more people at more affordable rates. In doing so, hospitals and doctors would be assured of getting paid for services.

Hospitals and doctors drove the creation of the Blue organizations back in the 1930s, a time when most private insurers weren't interested in offering insurance for hospital stays or doctors' services.

These days, self-preservation seems to be Blue Cross' biggest concern.

The insurer recently sent out a mailer across the state designed to pressure U.S. Sen. Kay Hagan to vote against any health care reform that included a public plan that would compete against private insurers.

The mailing urged recipients to forward a postcard to Hagan opposing the proposal.

The mailing apparently backfired. A lot of the insurers' customers received it, right on the heels of being notified about a rate hike. Many fired off angry e-mails.

Some wanted to know how much of that 11-percent increase went into the lobbying effort.

The mailing isn't the first expense Blue Cross has incurred trying to scuttle health insurance reform being considered by Congress. Back in the spring, it paid a consultant to produce slick, 30-second videos opposing government-run insurance.

Company officials admitted to poor timing.

But the hubbub raises larger philosophical questions regarding the governance and place of a nonprofit insurer at a time when even the role of private insurers is being questioned.

Again, Blue Cross has no stockholders.

So who does it serve and answer, its customers or its executives? And what if a day arrives when its very existence is deemed by those customers to no longer be in their best interest?

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Scott Mooneyham writes columns about North Carolina government and politics for Capitol Press Association.