by Dbug
Kent Conrad (D-ND) is one of the gang of six – the Senators on the Finance Committee who are trying to figure out how to pay for health care reform. Conrad has been pushing for a co-op plan, which would be done either regionally or state-by-state. Let’s take a look at health care in North Dakota, shall we?
Ninety percent of private health insurance in North Dakota is handled by Blue Cross Blue Shield of North Dakota (BCBSND). BCBSND is a non-profit company. In fact, their website says they’re a mutual insurance company (which means their policyholders have certain ownership "rights").
Sounds to me like a co-op. Even if there are minor differences between a mutual insurance company and a co-op, I’m sure the lawyers of BCBSND could figure out a way to convert to co-op status.
Now let’s look at the brewing scandal in North Dakota.
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UPDATE: BCBSND called a press conference for 2pm (Central), but it was pushed ahead to 3pm and now 4pm (2pm Pacific, 5pm Eastern). If it happens, you can stream it from wday.com (click on the AM radio button).
Here's what I learned. The 100-page insurance commissioner's report was finished last week. Blue Cross Blue Shield of ND asked for two weeks to read it and come up with a reply. It was supposed to be made public on Sept. 18 (which just happens to be three days after the Sept. 15 deadline for a health care bill).
But it was leaked to the Forum, who wrote a story about it. BCBSND gave the insurance commissioner permission to release the report today. So I think that's what will happen at 4pm. Stories about it will be in the news tonight. I'm guessing that later tonight or tomorrow, you can also probably download a PDF from the ND Insurance Commissioner's website.
Re-update: Nothing very interesting. BCBS says, basically, "We got caught. We're sorry. It won't happen again."
linkPosted on 9/8/2009
BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm today released the Report of Target Financial Examination (Report) of Noridian Mutual Insurance Company, doing business as Blue Cross Blue Shield of North Dakota (BCBS).
The Report is being released after the Insurance Department received written authorization from BCBS to publish the Report prior to the date required by state law.
The Report includes findings of excessive expenses paid with policyholders' dollars. Some of the main areas of concern include compensation, travel policies, investments and severance packages.
"The bottom line is that health care premiums are for health care, they are not for expensive retirement parties, corporate jets, risky hotel investments or a compensation structure that rewards senior management regardless of BCBS's financial performance," Hamm said.
Hamm has directed the company to address these matters immediately. In the directive letter that accompanies the Report, Hamm outlined that as a nonprofit mutual insurance company, BCBS's Board of Directors and management are obligated to act in the best interest of BCBS members in providing cost effective health care benefits to its members.
"I direct the Board to adopt and implement stricter standards in all matters of BCBS operations, human resources and financial management to ensure that the organization is managed for the good of its members," Hamm said.
BCBS is required to file a written explanation within 30 days outlining the actions the company will take to adopt and implement changes.
The Insurance Department used a team of financial insurance examiners to conduct the exam. It covered a period from Jan. 1, 2004 through March 31, 2009 and took the Department 14 weeks to complete. Much of this time was spent in Fargo gathering information from company executives.
Click here to read the report.Fargo, N.D. (AP) A report says insurance examiners found lavish expenses and bonuses among the expenditures of Blue Cross Blue Shield of North Dakota, the state's dominent insurer, over the past five years.
The Forum, saying it obtained a copy of the 101-page audit, reported Tuesday that the examiners outlined more than $418 million in administrative expenses over five years.
Insurance Department officials say they cannot comment on the report until Sept. 18, the end of a 15-day period for the insurer to review it.
The newspaper said premium payments funded nearly $15 million in employee bonuses that were almost assured regardless of performance, a $3.5 million investment in a hotel partnership and sales reward trips to resorts totaling $1.2 million.
Insurance Commissioner Adam Hamm ordered the audit in March after criticism of a trip to the Grand Caymans, costing $238,000, for Blues sales leaders. Blues CEO Mike Unhjem was fired later that month.
They suck:
Over time, however, the Blues lost their focus on community service and began to look more and more like their competitors. They abandoned community rating (which, realistically, they could not maintain when faced with competition from experience-rated commercial plans) and began to impose underwriting and cost-sharing requirements indistinguishable from the private plans. Although providers lost control of the Blue plans, the plans never took a leadership role in bargaining aggressively with providers, despite their market dominance in many states. Many of the largest Blue plans became for-profit, and those that remain non-profit are largely indistinguishable from commercial insurers. Although the national Blue Cross/Blue Shield association offers some coordination services to local plans, it has not resisted the move of Blue plans away from a community-service toward a for-profit orientation. Lacking a national focus on public service, state and regional plans have become indistinguishable from their commercial competitors.
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