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BCBSO: A SINGLE BLUE CROSS PLAN FOR OHIO WILL NOT HAPPEN NOW; WELL-INTENDED LEGISLATION APPEARS TO BE AHEAD OF ITS TIME

 Speech before American College of Healthcare Executives
 CLEVELAND, Sept. 23 /PRNewswire/ -- Ohio will have a single Blue


Cross plan, but it will not be now and probably not be arranged by the state legislature, John Burry, Jr., chairman and chief executive officer of Blue Cross & Blue Shield of Ohio (BCBSO), said today in a speech before the American College of Healthcare Executives at the I-X Center.
 Addressing the "Future of the Blue Cross & Blue Shield movement in Ohio," Burry said:
 "Although Ohio one day will have a single Blue Cross plan -- because nobody can stop the drumbeat of change -- it will not be at this time, and most likely will not be a marriage arranged by the state legislature. Recent, well-intended legislation to merge Ohio's Blue Cross plans appears to be ahead of its time."
 Burry pledged to continue to promote the concept of a single Blue Cross plan for Ohio from "today forward," just as his company has for many years, because "it is in the best interest of Ohioans."
 "We have learned this summer that Blue Cross & Blue Shield of Ohio is the only true not-for-profit health insurer in this state still dedicated to, and guided by, the founding mission of our 60-year-old movement," said Burry.
 Burry said Ohio started the summer with three Blue Cross and Blue Shield plans and ended it with only two. Central Benefits, the smallest of the three Ohio Blues, dropped out of the national association, taking its reserves with it.
 He said that Cincinnati-based Community Mutual, the state's second- largest Blues' insurer, is veering from the traditional Blue Cross mission of not-for-profit health insurance by spending more than $90 million to acquire a Florida-based, for-profit health-and-life insurer -- one that competes with Blue Cross & Blue Shield in Ohio and around the nation.
 Ohio law allows Blue Cross and Blue Shield plans to buy for-profit insurers that actively compete with not-for-profit Blue Cross and Blue Shield plans, plus it allows a company simply to drop its national Blue Cross and Blue Shield membership without the approval of its policyholders.
 "We think that is very wrong and support Substitute House Bill 425, which would close that loophole in the law," Burry said.
 "Certainly, the management of my company has no intention of using our customers' premium dollars for anything other than paying your medical bills, building reserves and running the company. And, we cannot stop the actions already taken by Community Mutual Insurance Company and Central Benefits.
 "But, we can protect the future. We can protect the future for you and all other Blue Cross and Blue Shield subscribers in Ohio by passing Substitute House Bill 425 that would protect policyholders' reserves, making sure the money is there when it's supposed to be to pay the customers' medical bills."
 There must be big changes in how our country manages its healthcare system, Burry said. "If we don't rein in its costs and excesses," he said, "then we will surely break the bank, and all of us, including our children and their children, will quite literally be the poorer for it."
 The bottom line on healthcare reform, Burry said, is how we make it work right here in Ohio. "It's about making Ohio a leader in national healthcare reform, not a follower," he stated.
 In a section on "general lessons learned," Burry said:
 "We have learned that we must cancel the blank check for healthcare. We have learned that we have too many hospitals, too many empty beds, too many medical specialists and not enough generalists, too many high- tech machines, and too many insurance companies.
 "The future is clear. Fewer insurance companies with greater buying power and lower administrative expenses can use the forces of marketplace competition to stop runaway hospital and physician costs."
 Burry said BCBSO has learned that the ability to negotiate freely with hospitals on the basis of price, backed by his company's buying power, is the "single best way to rein in healthcare costs."
 He continued: "We have saved northern Ohio consumers an estimated half-billion dollars...while cutting Cleveland's hospital inflation in half compared to the rest of the country...(and) we have knocked Cleveland from the fourth-most expensive hospital city in the United States all the way down to 19th in six years."
 The national trend among Blue Cross plans is merger and regionalization, Burry noted. There are now 42 states with a single Blue Cross plan, and Ohio is just one of eight states with multiple plans and only one of two (the other is California) where the plans compete.
 "Only mega-Blues plans will be able to compete for the major new programs -- and the jobs they will create -- that will emanate from national healthcare reform. To compete, an insurer must be bigger and financially strong with enormous computing power and know-how," Burry said.
 "The future is now. It is not tomorrow."
 In a recent article in The Wall Street Journal, Burry pointed out, the president of the national Blue Cross and Blue Shield Association said he expects there to be only about 40 Blue Cross plans -- out of the current 70 -- still around in the next few years. Some will merge and some will simply go out of business, The Journal reported.
 "Each state is not guaranteed its own Blue Cross plan and, as you can see, each state will not be able to control its not-for-profit Blue Cross destiny unless it acts sooner rather than later," Burry said.
 Burry said BCBSO is "more deeply committed than ever before to being 'true Blue.'"
 "Our one-and-only mission is to cover the greatest number of people with quality care at the lowest possible cost," he added.
 Burry said BCBSO intends to continue to shape Ohio's healthcare future proactively, and cited six reasons why a single Blue Cross plan is in the best interest of all Ohioans, including:
 -- Creating an Ohio Small Business Cooperative, inspired by BCBSO's success in working with Cleveland's Council of Smaller Enterprises, that would pool the buying power of small business for the best health insurance deals.
 -- Creating one of the largest and financially strongest Blues plans in the country with nearly $525 million in reserves that would position Ohio to control its own healthcare destiny.
 -- Making Ohio more competitive in the battle for big corporate health insurance business, as well as ready to compete for the new jobs in healthcare expected under the Clinton Administration.
 -- Using its increased access to medical provider data to improve the quality of hospital and physician care.
 -- Saving more than $100 million annually by reducing administrative expenses for the benefit of policyholders.
 -- Saving millions of dollars by instituting an even stronger statewide medical fraud program.
 -- Holding the line on, or lowering, healthcare costs.
 Said Burry: "The potential economic and social effects of healthcare reform are enormous. Economically, they are as big as a major military base opening -- or closing... The results for the winning states selected by the federal government to administer programs in the new healthcare order will be major new programs of job creation. The losers, and the losing states...will face the potential loss of thousands of jobs and millions of dollars in payrolls and revenues."
 In order to be among the "winners," Burry said he will continue to advocate and work for a single Blue Cross plan for Ohio.
 "I promise you that we will always work in the best interests of our customers and all of Ohio's healthcare consumers," Burry said.
 "I promise you that we will find a better way to bring this vision of a single Ohio Blue Cross and Blue Shield plan to life."
 Blue Cross & Blue Shield of Ohio is the state's oldest and largest health insurance company with more than 1.4 million customers. The company's reserves for the protection of policyholders stand at an all- time high of $249 million, according to Generally Accepted Accounting Principles. In addition, its customer service operation is the unchallenged best in Ohio.
 -0- 9/23/93
 /CONTACT: William Silverman of William Silverman & Company, 216-696-7750, for Blue Cross & Blue Shield of Ohio


CO: Blue Cross & Blue Shield of Ohio ST: Ohio IN: HEA INS SU:

AR -- CL004 -- 5059 09/23/93 09:02 EDT
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Publication:PR Newswire
Date:Sep 23, 1993
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