Is the New Anthem Off-Key? – Pacific Research Institute

Is the New Anthem Off-Key?

For reasons best known to its executives, Indianapolis’ WellPoint, owner of Blue Cross of California, has recently decided to re-name itself Anthem Blue Cross.

How this will help it address the snares and traps set for it by politicians, regulators, and self-styled “patient advocates,” I have no idea, but I suppose that if you’re in a hole, the first thing to do is re-brand yourself.

California is now indundated with billboards and advertisements filled with happy, smiling patients, apparently excited about receiving inexplicable EOBs (Explanation of Benefits) from Anthem Blue Cross instead of Blue Cross of California. The Los Angeles Times’ David Lazarus doesn’t buy it.

Mr. Lazarus is a fan of socialised medicine and I am not, but the facts are non-partisan. Anyone who watched as WellPoint’s last earnings call caused the stock to drop from almost $90 to under $45 knows that these commercial insurers (UnitedHealthGroup suffered a similarly dismal response from investors) are toiling with a broken business model. I don’t know if the members they’re losing are going to other commercial carriers (like CIGNA or Aetna) or non-profit carriers, or becoming uninsured.

But I do know that if I ran a carrier in this kind of crisis I would not spend my ad budget on happy faces, thrilled by a new logo. Instead, I’d call the public’s attention to things happening in the state of California that harm both patients and Anthem Blue Cross.

How about telling people:

  • How organized medicine is trying to reduce competition in health insurance by making it illegal for a health plan to operate in California unles its Medical Loss Ratio achieves an arbitrary accounting hurdle that has nothing to do with health care?
  • How some unknown lobbyists have convinced state legislators to impose a new mandatory benefit for unlimited gynecological cancer screening that will increase premiums enough to price 85,000 Californians out of health insurance, despite the expert report whose experts confessed they could not really estimate how much claims would increase?
  • How Sutter Health, Northern California’s dominant hospital system insists on “gag” clauses in its contracts with health plans, which forbid them from giving their members information on hospitals’ prices?

Not that I think the solution to health reform is for everyone to point the finger at each other, but until the citizens are informed about how the health care elites drive up health costs, they will not be ready for consumer-driven health care.

Which, buy the way, is the model WellPoint and its competitors must adopt if they want to fix their business models.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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