Blue Cross names new CEO
Says insurer to lose money this year due to rate caps.
Jessica Van Sack, Boston Herald, August 19, 2010
The incoming CEO of the Bay State’s largest health insurer acknowledged yesterday that he is staring down the barrel of another year in the red, declaring “we will lose money” this year.
“We’ve had a challenging last few years,” said Blue Cross Blue Shield of Massachusetts Executive Vice President Andrew Dreyfus, slated to become the insurer’s head honcho September 7.
“We lost money last year, and as part of the consequences of the rate caps imposed by the government, we will lose money this year,” he added.
Dreyfus, 51, of Newton has been a top administrator at Blue Cross for five years. He previously ran the company’s charitable arm, which was credited for crafting a proposal, Roadmap to Coverage, that outlined a universal health care proposal that eventually became law in the Bay State.
Dreyfus takes the reins at a time of upheaval and cost hikes in health care that have insurers and providers pointing fingers at each other.
One way to drive down costs is competition, and Dreyfus praised the controversial proposed sale of Catholic hospital chain Caritas Christi to a private equity firm as a catalyst for such competition between hospital giant Partners HealthCare.
“What we’ve told Caritas is, to the extent that what they’re trying to do is form a lower cost alternative to some of the higher cost systems in Massachusetts, that’s something this market needs,” he said. “I think it could provide some competitive balance in the state.”
Caritas is among a quarter of Blue Cross providers that have signed onto a new payment model that ties quality of care to the cost. Dreyfus said the agreement allows Blue Cross to measure quality with nationally recognized standards for things like infection rates and preventative care.
That new model breaks with a system in which providers earn more money by prescribing more tests and services.
A Bay State native, registered Democrat and former journalist at the South End News, Dreyfus was executive vice president of the Massachusetts Hospital Association and held top positions within the former Dukakis administration before joining Blue Cross.
But now that he’s at the helm, Dreyfus is vowing not to be a money-hungry CEO.
“As a company we’re very sensitive to the community’s concern about compensation in the health care system, and we’ll be sensitive to that concern as we negotiate,” he said.
The nonprofit took heat in 2009 for hiking former CEO Cleve Killingsworth’s annual take by 26 percent to $3.5 million - even as its income and membership tanked.
Dreyfus said his top priority is to control costs.
“The current rate of increase of health-care costs in Massachusetts is unacceptable and unsustainable for our customers,” he said.
As for premium rate caps imposed by Governor Deval Patrick’s administration, Dreyfus said: “While we didn’t like the method the governor went about in approaching the problem, we understood and shared the underlying frustration.”
© Copyright by the Boston Herald and Herald Media.
New Sense of Reality
Andy did a bang-up good job as first head ot the Blue Cross Blue Shield of Massachusetts Foundation. The Foundation succeeded fantastically in its mission to reshape the key healthcare question from access to affordable, quality health care to access to health insurance. It had two vehicles. The first was generous grants to groups working on healthcare reform and expanded access. The Massachusetts Ad Hoc Committee to Defend Health Care (later renamed to the Alliance to Defend Health Care), for example, received several such grants to keep it going. That source of funding quickly dried up once the Ad Hoc Committee declared its support for single-payer reform. The Foundation's other campaign was to hire the Urban Institute to present an annual series of conferences for "stakeholders" called the Roadmap to Coverage, culminating in the October 8, 2005 conclave which proclaimed the individual mandate as absolutely necessary for Massachusetts to achieve universal coverage. This neatly fit with the conservative call by Mitt Romney and his buddies at the Heritage Foundation. The individual mandate to purchase health insurance or be criminalized was originally part of the package pushed by Republicans in 1993 to oppose the Clintons' managed competition boondoggle. So the Foundation, under Andy's guidance, succeeded in producing the architecture of the Massachusetts Miracle, Chapter 58 of the Acts of 2006, which in turn produced the architecture of the bills passed and signed in March inside the Beltway. In the meantime, people suffer and die waiting for real healthcare reform and the establishment of health care as a human right. Voters in fourteen state representative districts across Massachusetts will have a chance to declare their support for this globally-recognized standard this November. Despite the Foundation, the movement for real change continues the fight, and is experiencing a resurgence as a new sense of reality sets in. - Sandy Eaton, RN