Washington Post----
One week after the nation's health insurance lobby pledged to President Obama to do what it can to constrain rising health costs, Blue Cross Blue Shield of North Carolina is putting the finishing touches on a public message campaign aimed at killing a key plank in Obama's reform platform.
As part of what it calls an "informational website," the company has hired an outside PR company to make a series of videos sounding the alarm about a government-sponsored health insurance option, known as the public plan. Obama has consistently maintained that a government-run plan, absent high-paid executives and the need for profits, could be a more affordable option for Americans who have trouble purchasing private insurance. The industry argues that creating a public insurance program will undermine the marketplace and eventually lead to a single-payer style system.
In three 30-second videos, the insurer paints a picture of a future system in which patients wait months for appointments and can't choose their own doctors, according to storyboards of the videos obtained by the Washington Post.
One video titled "Waiting" shows a receptionist fielding a request from a patient enrolled in the new program.
"The government plan. Okay hold on...let me see what's available," the woman says into the telephone. On the screen, with the caller on hold, the receptionist rearranges items on her desk, looks at a wide- open calendar and then fibs: "It looks like the first time we can fit you in is in two-and-a-half months."
Another spot in the series, being developed by Capstrat media in Raleigh, shows a woman and child wandering down a darkened hospital doorway "as if they're starting to realize that they've lost their way," according to sketches of the video. "We can do a lot better than a government-run health care system," the narrator concludes.
Blue Cross Blue Shield spokesman Lew Borman said the videos are still in the draft stage. On the question of creating a public option to compete with private insurers, he said: "We believe an unchecked government-run plan would lower payment to doctors and hospitals, forcing them to attempt to charge private insurers more and thus further eliminate private insurers' ability to compete against the government."
On its Web site, Capstrat touts its "agility in turning complex issues into simple, powerful and persuasive stories." Company president Karen Albritton declined to comment.
Blue Cross Blue Shield of North Carolina has 3.7 million members and processed more than $10.7 billion in medical claims last year. Get a first look at the video storyboards here.
Think Progress----
Blue Cross/Blue Shield of North Carolina’s (BCBSNC) ads that attack the public health plan as a mechanism for rationing health care are criticizing an idea, not a specific proposal. Recall that Democrats argue that a new public option should compete with private insurers for beneficiaries, but they have yet to agree on what that plan should look like. Some Democrats maintain that a new public health plan could be modeled on the experiences of state governments that currently offer their employees a choice between traditional private health insurance and a self-insured plan administered by the state.
Thus, given the company’s role in administrating the State Employee Plan in North Carolina, their ad seems all the more perplexing: BCBSNC may be attacking the very same kind of model that it now administers.
BCBSNC’s behavior has led to disaster in North Carolina. Recently, the State Health Plan “came in $137.6 million off its budget for fiscal year 2008, resulting in a $79.7 million loss.” Part of the problem was that BCBSNC’s administrative “expenses cost $200.1 million more than planned.” Its administrative expenses “have never been audited“:
The plan also underestimated administrative expenses by $36.3 million due to the fact that the consultant hired to forecast expenses did not have access to Blue Cross and Blue Shield of North Carolina’s costs to accurately predict expenses… The auditor’s report places much of the blame for the administrative expense overruns on the failure of State Health Plan officials to draft a reasonable contract with BCBSNC. The current contract does not specify what costs BCBSNC is able to charge to the plan and provides no incentives for BCBSNC to keep its costs down. In fact, according to the audit, it does the exact opposite. The plan agrees to pay BCBSNC its costs – plus a percentage of the insurer’s costs to provide a profit margin. Such a setup, however, means that BCBSNC makes more as the state’s costs rise. The audit report notes that the federal government stopped using such contracts in 1941.
Now, the North Carolina legislature is considering a “major fix” to the State Health Plan “that will cost taxpayers roughly $710 million, reduce benefits for state employees and teachers.” State employees would have to pay an average of more than “$600 per person over the next two years” and all premiums “would increase by 10 percent in each of the next two fiscal years.”
BCBSNC behavior suggests that reforms should be weary of using state-run plans as a model for the new public option (third-party private administrators dont’ have a record of lowering health care spending). But more importantly, BCBSNC’s attacks against health reform suggest that the company is afraid of being held to account.
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Sources: Washington Post, BCBS, Huffington Post, Think Progress, Day Life, Google Maps
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