What can make health insurers back down from a fight?

Blue Cross and Blue Shield of North Carolina has just launched a major multimedia campaign in an attempt to improve its image. In its website, BCBS portrays goats and asks us to choose a scape goat for rising healthcare costs:

The attempt by BCBS of North Carolina to shore up its reputation comes at an interesting time — a interesting “coincidence” some might call it.

Why? Because, on the other side of the country, Blue Shield of California has been raising premiums — not once, not twice, but three times in just eight months — the first two happened October 2010 and January 2011, and the third was planned for May 2011.

By its own admission:

“If its third planned premium increase in recent months is allowed to take effect May 1, Blue Shield says, 45,500 customers will face hikes of 50% or more, and 900 will see their bills rise 80% or more.”

So, what made Blue Shield just recently back down from increasing its premiums a third time in less than eight months? California law clearly allowed it do so (as long as it could project that 80% of its premium revenue would be spent on healthcare-related costs).

Which explanation makes more sense:

  1. As Blue Shield’s CEO explained, because their mission “is to provide Californians with access to quality healthcare at an affordable price”?
  2. As company officials say “largely because people are going to the doctor less” — i.e. their expenses are going down, so why increase premiums?
  3. As reported by the LA Times, it was because of “mounting pressure from the public and political leaders”?

For the answer, crisscross back across to the middle of the country to Illinois. There at the beginning of this year, Blue Cross Blue Shield of Illinois was trying to impose prior authorizations for patients to gain access to mental health services. Prior authorization is a cost-containment procedure that requires a prescriber to obtain permission to prescibe a medication prior to prescribing it (MedicineNet).

As the Chicago Tribune reported, Blue Cross Blue Shield of Illinois backed down from imposing prior authorizations “amid intense fire from health professionals and the Illinois insurance director”.

Public Pressure. In all three instances — all involving Blue Cross organizations — public pressure has caused the health insurer to take action. More importantly, it was public pressure of a particular kind — neither corporations nor special interest groups. It was just “people on the street” (so to speak) — physicians, their patients and others demanding fair treatment.

Boxcutters Gem #905 – Use public pressure (not from corporations or special interest groups) to make health insurers back down from a fight.

2 Responses to “What can make health insurers back down from a fight?”
  1. Michael Wong says:

    Here are some comments that I’ve received from pharmaceutical product managers or advisors related to this post:

    “I have found that when a community group is trying to influence a payer’s policy, be it on the Public (read Medicaid, Medicare etc) or Commercial (employer or individual insurer) side, it is important to play cards other than “my poor Johnny needs help”. Helping Johnny doesn’t matter. Helping the payer achieve their goals and objectives is critical. Often, the payer’s objective is preserving tax-based revenue or shareholder equity. Integrating these concepts into the “my poor Johnny” argument is the trick.”

    “Health Insurers are in the business of selling health insurance, therefore they will listen to any large group that can affect their market. This could be public advocacy groups within their market or employers who buy their group policies. With regard to Medicare contractors, they are most repsonsive to the providers, particularly state societies within their jurisdiction, CMS and Congress.”

  2. Michael Wong says:

    Robert Kaminsky at Medspan comments:
    “I have worked with clients to share with managed care the patients’ value proposition for infused versus injectable therapies. Somewhat surprising to me, payers are open to the patient’s value proposition but only if there is a demonstrated clinical benefit supported by documented evidence. Arguments of convenience or preference don’t carry weight with payers. Evidence-supported arguments about improved outcomes due to enhanced compliance or physician oversight can be persuasive.”

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