Moral high ground elusive to UnitedHealth and WellPoint/BlueCross
Chief Executive at Health Insurer Is Forced Out in Options Inquiry
By Eric Dash and Milt Freudenheim
The New York Times
October 16, 2006
Dr. William W. McGuire, a medical entrepreneur who built the UnitedHealth Group into a colossus in its field, was forced to resign from the company yesterday and to give up a portion of the $1.1 billion he holds in harshly criticized stock options.
At UnitedHealth, even the man named to replace Dr. McGuire as chief executive has been a beneficiary of backdated options: Stephen J. Hemsley, who has been Dr. McGuire’s top lieutenant, will lose a sizable portion of his options, the company said.
And…
Hospital Sues Blue Cross for Payments
By Lisa Girion
Los Angeles Times
October 14, 2006
A class-action lawsuit filed Friday on behalf of all California hospitals accused Blue Cross of California of routinely violating state law by refusing to pay hundreds of hospitals statewide for patient care it authorized.
“Hospitals provided care to those Blue Cross patients in good faith,” said (Jan Emerson, a spokeswoman for the California Hospital Assn.). “In many cases that care is pre-authorized by Blue Cross. When they cancel coverage after that care has been provided, that causes a problem for the hospital.”
The suit alleges that, in many cases, such revocations are themselves illegal, triggered by a purported corporate policy to avoid expensive claims.
http://www.latimes.com/business/la-fi-hospitals14oct14,1,3867891.story?coll=la-headlines-business
Comment:
By Don McCanne, M.D.
Three questions:
(1) How many stock options would be granted to the trustees of a publicly funded and publicly administered program of national health insurance?
(Hint: No stock shares exist in a program owned by the citizens of the nation rather than by passive investors on Wall street.)
(2) Under what circumstances would a publicly funded and publicly administered program of national health insurance retroactively deny payment for legitimate health services already provided?
(Hint: The mission of a publicly owned national health insurance program is to prevent financial hardship for individuals requiring health care, whereas the mission of a for-profit health insurance corporation requires the adoption of policies that would maximize investor return.)
(3) Must the moral high ground remain elusive?
(Hint: As long as we leave the private insurance industry in charge… )