Join the conversation to learn more about what’s going on in North Carolina when it comes to the health care issues we all face.
Blue Cross and Blue Shield of North Carolina invites you to learn how we’re fighting to rein in medical costs, and how you can too.
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from Let's Talk Cost 2011
May 6, 2011
Do you think insurance companies make too much? Why or why not?
Cathy H. commented on May 6, 2011
I think BCBSNC is better than a lot of health insurance companies when it comes to salaries and wasteful spending. Please share with us how much this fancy TV ad campaign and website cost your customers. And how much you're contributing to which political candidates.
David Kochman commented on May 10, 2011
Cathy, the cost of this campaign and website will not affect the premiums of our customers. Premiums are determined by the costs of medical goods and services. As needs and costs for those goods and services rises, so do our premiums.
The BCBSNC political action committee, like many other PACs, is a totally voluntary contribution from employees. It is governed by an employee-based board of directors and exists to give our employees a voice in the democratic process and to help us protect the interests of our customers. Reports of our PAC contributions are filed regularly with the Board of Elections.
Jamie A. commented on May 6, 2011
Just found out today that our premiums are going up 30% w/ BCBS of NC! In my job, if we went up 30% we wouldn't have any customers, especially with the struggling economy and record high gas prices. There is no justification for this. BCBS + "Obamacare" = your screwed!
David Kochman commented on May 9, 2011
Jamie A., thank you for participating on LetsTalkCost.com. Increases in medical costs, services utilized by members and policy changes can all contribute to premium increases. While we know that’s not the answer you are looking for, it is the reason why we started this website. What can we do to help rein in medical costs? How can we be better partners?
If you’d like to speak more about your specific premiums, we’d be happy to discuss. Please call the number on the back of your member ID card to speak with a customer service professional, or if you are part of a group policy please have your benefit administrator contact the account manager.
Rick R. commented on June 1, 2011
@Jamie, there are no effects at present of the Federal Healthcare law on BCBS NC prices. In fact our AG has filed for exception. You beef is with the current system. Do you know about the Emergency Medical Treatment & Labor Act of 1986 passed by a bipartsan majority and signed by Ronald Reagan. It is the unfunded mandate of unfunded mandates. It is the base of the current issue. If you have not read it for yourself, you have no grounds for discussing the current finacial issues in healthcare today. READ IT. Then understand the long term effects on your pocket book of having uncontrolled taxation authorities.
Do I trust BCBS NC, not since they tried to go for-profit claiming that their current structure would not let them keep costs down as effectively as a for-profit, 'cause everyone knows that having a bigger nut every month will lower premiums. Like the NC committee member said, "who do we have to fire to correct this situation?"
BUT the costs of healthcare are going up because, the baby boom generaltion is using more healthcare, the EMTLA 1986 gave us universal healthcare in the most inefficient manner possible, and frankly there is more options to keep us healthy, and the baby boom generation is the largest and first to have to handle these issues in a short time. Add to that all the irrational one liners like, "BCBS + 'Obamacare' = your screwed." Oh, did you know that the same text used in the Democrat's bills were taken straight from the 2003 Medicare changes constructed and voted in by the Republicans, AND that the same Republican that headed the committee that wrote the changes is the same person who came up with "death councils"? See the irrationality???
Jamie A. commented on June 1, 2011
@Rick, You can't tell me that our government's efforts to reform healthcare haven't had some negative impact on premiums, regardless of it being Democrats or Republicans. My situation is this: my employer doesn't offer heath insurance, so I have to rely on my wife's employer. I have a chronic health condition, in which no one will insure me. BCBS has a monopoly on me, because there is no other insurer available. My wife's employer picks up much of the tab on her insurance, but dependents such as a husband (me) or a child, they pay $0 or very little, leaving us to pay the full premium, being whatever BCBS feels that they can profit on. Is this fair? Isn't "Obamacare" supposed to fix this? We can't afford this. So, I'm going to do my part to prevent increases in medical costs, and drop insurance altogether. I can't handle seeing over half of her paycheck going to taxes, and health insurance. Maybe one day somebody will make this a more fair system, and health care won't push people into poverty.
Joseph D. commented on May 7, 2011
Yes, but for those who have spent years drinking the blue cool-aid, you cannot see that you are poor stewards of the premiums you collect from a public with little to know options in your state.
You have administration costs in the double digit range. Your Siebel and Healthy Incentive engagements are only a few examples of out of control spending. You think the only measure of success is actually completing an engagement. You are in the only business where you think it's OK to spend $10.00 to make $1.00 and then reward yourselves for it. What about the price increases that the public doesn't read about in the paper, like the increase in PMPM to pay for the cost over runs for your Siebel implementation that you sent an internal memo to all employees instructing them to not tell anyone.
The reason we have health care reform is because companies like BCBSNC have such poor leadership that the government has to create legislation mandating business decisions for you, because you are so blind to the real causes of high insurance rates that you are incapable of making good decisions on your own. After all, that is what health care reform is about.
You really should be ashamed at yourselves, it's your fault the federal government has to mandate business decisions for you (health care reform), and it’s pathetic.
BCBS is expert at blaming others, you spend millions of dollars blaming your members who smoke and are overweight for the high cost of health care. You are a health insurance company, not an IT organization, a bank (Blue Bank) and certainly have no business managing programs to instruct others in ways of maintaining good health when out of all your customers in NC, Blue Cross employees are the least healthy in the state with an obesity rate among your very own employees that is laughable.
BCBSNC is well into a three-year plan to reduce our administrative costs considerably, but because insurance administration is only a part of health care spending, we know it’s not the final answer. So we’re also developing programs to improve quality, reduce medical errors and promote payment arrangements that reward providers for positive health outcomes. The BCBSNC employees are encouraged to take part in all of the many health and wellness benefits we offer. We know we can’t fix a problem this big on our own. That’s why we’re asking for your ideas and support for a group effort to cut medical costs across the system
The recent health care reform is only one part of costs, and even with the reform, we know that our health care system can’t continue on an unsustainable path. We must address the cost of health care, we hope this website will help us all find a role to play in that effort.
Joseph D. commented on May 10, 2011
Your current plan to reduce administrative costs needs to be more than providing cheaper coffee to your employees and forcing printers to print double-sided to save on paper costs. 3 years is enough time to have brought your administrative costs into the single digit territory. Instead you drag your feet and cross your fingers until a more favorable administration takes over the White House. Your plan to reduce costs does not contain any real measures to drive down your vendor costs while driving efficiencies into your own business and systems processes.
Your response to reduce medical costs is typical of your organization and deflects the attention away from Blue Cross's failings. How can you expect to be instrumental in lowering medical costs when you cannot contain your own cost of doing business. BCBSNC spends far more than it should to manage data and business systems.
The way you are going about addressing the myriad of antiquated business systems is preventing you from attaining a single digit administrative %.
For example: WalMart has an administrative cost of approximately 8% and they are definitely larger and far more complex than BCBSNC. At last count BCBSNC has about 13 core products (HMO, PPO etc., yes you have many thousand product codes but they are all deviations on the same theme Like WalMart you do not manufacture anything. You both provide a service.
You suggest that Health Care Reform is somehow responsible for raising costs. You have got to be kidding. The reason we have HCR is because companies like BCBSNC cannot contain its costs and provide a reasonably priced product. A product by the way that everyone needs.
You really need to take a hard, honest look at the real reasons Health Insurance rates are so high and you need to begin with yourselves and the manner in which you do business. You are right about one thing, you are on an unsustainable path as long as you cling to your current way of doing business. You are a business, its about managing your costs first.
Ya L. commented on May 11, 2011
I feel part of the reason for HCR is: the government wants to shift its share of medical cost to insurance companies. Compare with other countries where no well-established health insurance system like ours, people try very hard to eat healthy, exercise, etc to take care of themselves and reduce the ultimate medical cost, somehow, I feel here health insurance is abused. Actually, we all need to share part of the cost, patient, insurance, medical providers, government, etc. The goal is to improve patients health condition and manage the cost.
Patrick Getzen commented on May 11, 2011
VP & Chief Actuary
Joseph, thank you so much for sharing your thoughts on how we can reduce costs internally. We have a comprehensive, three-year plan to reduce our administrative costs by 20 percent or $200 million. We are taking an in-depth look across the company at ways to become more efficient while maintaining high levels of customer service. Things we’ve done already include eliminating most open positions, consolidating our office space, becoming far more energy efficient and greatly reducing travel and meeting expenses. However, since we spend more than 85 cents of every premium dollar on medical expenses, our administrative cost efforts are just one part of the total solution toward more affordable premiums. Health care costs will only be lowered through a combination of measures from doctors, patients, insurers, hospitals, attorneys, pharmaceuticals, and the many others who contribute to the cost of healthcare.
Joseph D. commented on May 11, 2011
Patrick,Thank you for the response but the things you mentioned: eliminating open positions, consolidating office space, energy efficiency and reducing travel expenses are the low hanging fruit items that you have been doing for at least the past two years and your "in-depth look across the company" has been going on for many years now also. So how much of a dent have you made in the 20% during the past 5 years?
Thank you for proving my point from my earlier statement. You have saved a few million addressing the low hanging fruit items but gloss over the bigger ticket items and that is the overwhelming cost of Information Technology in your organization.
Your statement about the 85 cents makes BCBSNC sound good but the reality is that you manage around 7-8 BILLION dollars a year. The manner in which you state this is misleading. Your administration costs have increased proportionally with the increase in revenue for many years with no ceiling in sight until outside forces have made you take a look at your own spending. RE: Health Care Reform
Instead of complaining about it BCBSNC might benefit by viewing HCR as the American public's disgust with all the scapegoating.
I do not disagree that reducing health care costs needs to be a shared experience. The problem is; How can BCBSNC expect any of the groups you mention to take you seriously when you cannot effectively manage your own cost of doing business.
The real problem for BCBSNC is that your culture is not conducive to designing and managing cost effective business systems and processes. You hire vendors who are experts in these areas and to not listen to them and as a result end up paying far more for than you should for IT or worse.
You would benefit from some of what helped Jack Welsh turn GE around or similar leaders who have had success by enforcing a universal methodology and creating conditions leading to a great deal of churn because if the playing field was level in NC, in its current state BCBSNC could not compete.
John W. commented on May 9, 2011
Profits of top 11 insurers, May 2010:
Yep. But contrary to popular opinion it's not a crime to make a profit.
You are correct, it is not a crime to make a profit. But profiting from other peoples misery is not what America is all about and when the CEO of BCBSNC is capable of collecting the largest bonus in BCBSNC history during one of the worse recessions on record is appalling to say the least. Let the petroleum companies make large profits, you can always boycott them but you cannot get away from the fact that one day you will need health care no matter what.
Oh, I forgot, BCBNC is actually a not-for-profit or non-profit. I can never keep it straight. Maybe if they had some shareholders to answer too it may be different.
Juan P. commented on May 13, 2011
If you spend a significant amount of money on keeping congress in your back pocket so that you can make a profit, that is a crime.
BCBS NC has an oversight board much like a Board in a For-Profit. Currently shareholders of major companies have little to no control over the executives in the company. Congress just passed a law allowing shareholders a nonbinding vote on executive compensation. You can guess how effective that will be. Yes, there are ways to force a vote, but most stock is owned by mutual funds, and with the exception of Van Guard, are very bad stewards. Now you know why CEOs can steal millions with little to no oversight. Since the CEO nominated the members of the board and they get a nice compensation package, you can guess how the votes on ceo compensation will go.
Putting another layer of cost on the monthly nut (dividend payment) will not drive costs down. As the NC committee member questioning BCBS executives stated after they propsed the same, "Who do we have to fire to fix the situation?"
Frank R. commented on May 9, 2011
BCBSNC is "well into a three year program to reduce administrative costs considerably" ? Are you serious?
What about the state employees, forced to purchase your product, who don't get a three year administrative cost reduction plan? They get a one year plan to balance our state budget, increased premiums tantamount to a pay cut, which pay for BCBSNC administrative salaries markedly higher than your counterparts in the public sector.
David Kochman commented on May 12, 2011
Hi Frank – Blue Cross is proud to serve the 600,000 state employees, teachers and retirees in the State Health Plan and we’d like them to know the facts. Our contract with the state is to administer the plan set by the NC General Assembly. We don’t set the rates or the benefits for the State Health Plan, we only administer the plan. Thank you for expressing concern and taking the time to post on LetsTalkCost.com. We hope that you will continue to participate and share your perspective.
David M. commented on May 11, 2011
You are not very transparent at all. Where are your financials posted? I have even tried to call your rep on the 888 number and he could not tell me where to find your financials at.?? He pretty much refused to tell me any kind of financial info about bcbs other than 85% of money goes to claims....
Look up WLP on Yahoo finance. They are with Well Point. They made 6 billion in cash flow form operations in 2010 and used 2.5 billion to pay their executives stock dividends.
oh yeah....did say something about them building a childrens play park in Greensboro somewhere.....mmmmmm
Jasmine Smith commented on May 12, 2011
Sr. Program Manager
We proudly work hard to promote improved health and well-being through our community partnerships. Collaborating with Kaboom!, on a playground in Greensboro is a perfect example. Together we are providing a safe, clean place for children to play, thus allowing them to get in more physical activity. We feel that if we invest in community efforts we can help prevent and/or reverse unhealthy trends, in this instance, childhood obesity.
As both an employee and consumer of BCBSNC, I am proud of our efforts to be a good corporate citizen.
I hope this information is helpful to you.
The only playground in the Triad of NC that has been built lately is the one in Winston Salem built by Baptist Hospital/Bowman Gray Med of Wake Forest. You know, a medical provider?
Jasmine Smith commented on May 13, 2011
Hi Bevan, The playground we're talking about hasn't been built yet. It's scheduled for later this month.
Oh! and why does this website require you to have such an obnoxious password? Has to have one capital letter and one number???
K. D. commented on May 11, 2011
Have you ever heard of spam? Try adding something meaningful to the conversation.
How does BCBS get such low contract rates? Why cant a patient walk in and pay the same rates that BCBS gets to pay? I think if people could pay what the insurance companies pay then we could get rid of the insurance companies...
Aha! A real question! Why can't a patient walk in and pay the same rates that BCBSNC gets to pay? Try asking your provider. The rates that uninsured people are asked to pay are a crime. My son went to the emergency room because he was vomiting and dehydrated. They gave him an IV with fluids and 2 popsicles and sent him home and the cost was over $2700! Thank God I had BCBSNC and they do get the rates they do. I wound up paying the whole freight because I have a large deductible, but at least I wasn't paying $2700. I would like to know how a hospital could possibly justify that price, but I think the people to ask are the hospital, not the insurance company.
Actually, you can get discounts as long as you can affirm that you do not have insurance. Just sign a form that says so and you can get a 40% discount.
@KD, In fact if you talk to the doc upfront, you will get those rates. S/He will instruct the office manager to do so. I had to do this when I was younger several times. In fact, you can usually do this afterwards with hospitals, too. Some hospitals don't budge, but if you contact the local media and threaten to force them to take you to court, they will.
The problems this must be done on an individual, relief basis or the docs will lose the game with the insurance companies. The docs have to up their prices to fight of the constant negitionation for lower procedure prices.
Frankly the dumbest thing docs every did was to agree to procedure based payments. The insurance companies promised faster payments and lower costs. Now every doc has to have an office manger and several insurance clerks and coders. AND then they still get paid late! Which makes the docs raise rates to cover the cost of delayed payments. You can bet that affected your premiums in the end.
Charlene K. commented on May 13, 2011
Insurance companies will not pay for cheaper alternatives even though they are cost effective and work. Case in point: Surgery required on foot. Takes 3 separate incisions. Even though podiatrist combined all three surgeries to eliminated the patient undergoing anesthesia and recover three (3) separate times the insurance company wanted the patient to have the three surgeries. They only reimbursed the Dr. for one surgery and denied the rest. Patient had to pay rest of charges out of pocket.
EDTA therapy has been proven effective in over 3,000 studies with over 30,000 patients. It cost about $30,000 - $35,000 dollars total. It cleans/clears placque from the veins and artieries in the entire body. Insurance companies will pay for Open Heart for over $100,000 that only fixes a few arteries and has to be repeated every 7 - 10 years. OHS has a 20% death rate in the first year after surgery and EDTA therapy has not caused a death since it began almost 70 years ago.
My husband needed a CPAC machine. The insurance company rented it for 6 months and then purchased it outright for the full price. The rental was not deducted and it was the same machine. Purchasing it outright would have saved the rental fee of over $1,200.
Dr. Don Bradley commented on May 20, 2011
SVP, Chief Medical Officer
Thank you for sharing your experience.
In order to fully comment on the issues you raise, we need more specific information regarding the services you reference, including the dates of service, provider, and member ID. I encourage you to contact our customer services department, and we will track them down.
Without details, let me make more general comments.
With regard to bundling payments for surgery, BCBSNC uses standard correct coding rules that align with Medicare and AMA guidelines. If you received care from a participating provider, you should not have been billed for unbundled services. You may have a deductible and/or coinsurance that you will need to pay the provider.
Concerning chelation therapy (EDTA), BCBSNC provides coverage for such treatments where the best available medical evidence supports its use. Our medical policies and practice guidelines are available through the bcbsnc.com website. Just type in “EDTA” or “chelation” in the search box. Chelation for treatment of atherosclerotic heart disease has not been shown to be effective in well designed studies.
Finally, with regard to renting a CPAP machine, the rental costs should be applied to the purchase price. Please contact our customer services department so we can help resolve this issue.
Charlene K., I use a CPAP and have used it well. They make a difference. High quality machines cost in the $1800 range with all equipment needed to sleep with one, but there is one more factor, the shop and therapist must make enough to let the patient have time to see if it will be a good therapy for them. Some people just don't adjust and you find that out in the first few months, but you still have to have the machine in service and refurbish it if it is returned, the depreciation curve is steep. So the $ aren't as bad as they seem when you look at them in full.
As far as EDTA, years of SCIENTIFIC studies have not shown effective treatment. Please note that 30K subjects in 3K studies is 10, so to get any good studies you have to eliminate at least 80% as too small and useless. If the numbers are 3M in 3K studies, maybe... The American Heart Association was interested in the past and funded over 10 well designed studies in multiple universities and found no effect. It was not what the AHA wanted to see, other than it was seeking the truth. EDTA is like mega doses of C, no effect but everyone wants to believe it.
Don't know anything about the foot surgery, but there is always a lag between the time of accepted practice in a discipline and reimbursement. I personally believe if the major body, like the ACC in affairs of the heart, accept it, the insurance companies should.
Jenna T. commented on May 16, 2011
Well, there are two sides to that.
Yes because they are sometimes charging WAY TOO MUCH for the insurance.
No because just think of all the money they are loosing my making a wrong risk. I am getting my license to sell insurance right now and I have to tell you that it is all more complicated than it may seem. Insurance companies raise money because they loose A LOT OF MONEY when they have to pay somebody off large sums of moneys when the person just got the insurance and insurance just barely made any money.
Ande K. commented on May 18, 2011
My BCBS premiums continue to skyrocket and my co-pays continue to go up every year. Meanwhile, BCBS showed a $168 million profit in 2010. Hmmmmmm. I think it's the policyholders who are just getting by - or not even doing that well. You decide.
David Kochman commented on May 20, 2011
Ande K. - We base premiums on the costs of medical goods and services and how often those goods and services are used. As costs and needs for services rise, so do premiums. Last year, 86 cents of every premium dollar we collected was spent on medical care.
If you have any questions about the cost of your plan and premiums, we’d be happy to discuss them with you. Please call the number on the back of your BCBSNC membership card.
@David: Since you are a non-profit insurance companies isn't that "profit", actually overcollection applied to next years premiums to level out the costs over time.
Samantha J. commented on June 21, 2011
This question can easily be answered. The executives responding to these posts just need to state their annual salaries. I am a public school teacher with a Master's degree and 5 years of teaching experience. I make about $37,400 a year, and I haven't had a raise in 3 years (about to be 4). So, DAVID KOCHMAN, PATRICK GETZEN, and JASMINE SMITH, are you "getting rich" or just "getting by?"
Kathy Higgins commented on June 24, 2011
VP of Corporate Affairs
Samantha, I can certainly understand your frustration. While I appreciate your openness with disclosing your salary, I hope you can understand that others may not be as comfortable with doing the same. We do file the salaries of our ten highest paid executives annually with the Department of Insurance, and that document is available publicly. We realize the need for people from all areas of health from doctors to individuals and yes, insurers, to work together to reduce costs, which is why we have created this site. Please continue to share your thoughts about reining in medical costs on Let’s Talk Cost.
Samantha J. commented on July 3, 2011
Why thank you, Kathy.
James Wilson: $1,865,363
Maureen K. O'Connor: $1,280,651
John T. Ross: $1,053,111
Gerald A. Petkau: 905,919
Don W. Bradley:$852,762
Ian K. Gordon: $777,811
Alan Hughes: $536,495
Fara M. Palumbo: $530,493
Bradley T. Adcock: $462,726
Ronald E. Smith: $429,928
I ask again, are you "getting rich" or just "getting by?"
Kathy Higgins commented on July 7, 2011
Samantha, thanks for your post and bringing up a topic many have shown interest in. BCBSNC salaries account for less than a tenth of a cent of every premium dollar. Executive compensation is determined by an independent board and national consultant. And, just like many companies out there, we pay our executives based on results. If the company does not meet its goal, which includes member satisfaction, operating expense reduction and medical expense reduction, our executives can lose out on more than half of their compensation. Our number one priority is our members; more than 86 cents of every premium dollar covers medical costs for our members. How do you think our executives are paid compared to other companies?
Martin G. commented on July 7, 2011
You make an excellent point. I agree with you 100%. These numbers are not astonishing in a capitalistic society; however, they certainly raise concerns when you remind yourself that BCBSNC is a non-profit or not-for-profit company. These numbers are actually tame. The previous CEO took-in a compensation of almost 4 million dollars in 2008. Would you donate to the Red Cross or United Way if they had individual compensations in the millions? I'm sure that a compensated spokesperson will respond with a legal technicality. Regardless, it is concerning for a non-profit or not-for-profit. We trust these individuals to use our premiums responsibly. Unfortunately, under a facade of 86 cents to the dollar or one-tenth of a penny, this company still has an excess of what appears to be millions and millions of dollars. So much so that they donate money to local "organizations" that in some cases have no relation to the medical community just so that the DOI won't ask to many questions, in my opinion folks. Plus, the donating non-profit gets its name in the local news (always nice), while also funding a Public Affairs/Community Relations department that has no actual bearing on healthcare costs, although your premiums directly fund these donations and the previously mentioned Community Relations department. Why would a non-profit need such an agressive Community Relations dept if everything is done by the book? We pay for these departments and donations, with our premiums, that have no bearing on actual healthcare costs.Your argument is passionate. I'm pretty sure that other arguments in opposition are more based on incentive rather than passion. Therefore, you really have to take it with a grain of salt.
Don K. commented on August 3, 2012
David why will BCBS work (with Obama) to let us buy across state line's?? Keeps car insurance in check!