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Would Having More ‘Blues’ Make Us Happier?

Many of you residing in Iowa reading this post are probably covered by a Blue Cross and Blue Shield health insurance policy. Most likely your health plan is insured by Iowa-based Wellmark, Inc. or Wellmark Health Plan of Iowa.

Using data from the Iowa Insurance Division, a recent Des Moines Business Record article reported that both Wellmark plans “account for roughly 78 percent of the large group market in Iowa and 81 percent of the (Iowa) small group market.” Additionally, the individual market in Iowa has Wellmark companies accounting for 45 percent of individual health policies in the state.

Overview

For decades, Blue Cross and Blue Shield (BCBS) plans located in each state, Iowa included, did not compete with ‘sister’ BCBS plans in other states. Wellmark BCBS was, in essence, protected from competing with other Blue plans for Iowa business.

However, there was one large exception to this friendly competitive arrangement. Other Blue insurers can compete for large national-account business ONLY if the home state Blue plan chose to “cede” the client to them. As an example, if Hy-Vee, headquartered in Iowa, wished to use a larger BCBS plan, such as Anthem, Inc. – the largest of all BCBS plans – Wellmark would need to ‘cede’ this Iowa-based business to the desired Blue plan. Employers really had little recourse on fighting this arrangement, other than threaten to choose a non-Blue plan such as United Healthcare, Cigna, Aetna, etc.

It is important to mention that within the Blues system, if a large, Iowa-based organization is enrolled with Wellmark, they gain access to the BlueCard® PPO for their out-of-state employees – which offers any additional negotiated arrangements made by each state’s Blue plan. This is a big advantage to large national accounts, and has worked reasonably well for decades. However, if the employer was, for some reason, unhappy with the services provided by that ‘home’ Blues plan, they would need to apply leverage to move to another desired Blue plan outside that state. As a result, the pursuit for seamless customer service was rather ‘clunky.’

In 2012, a national class-action lawsuit was brought on behalf of employers and individual policyholders with Blue coverage. The lawsuit alleged that anticompetitive behavior among BCBS plans who conspired to divvy up markets and avoid competing against one another, consequently drove up customers’ prices.

Tentative Antitrust Settlement on Blues

In September, a tentative deal was reached whereby the BCBS Association agreed to pay $2.7 billion to settle the claims and curtail competitive practices that limited competition among all 36 BCBS insurers – which includes Wellmark, Inc. According to the Wall Street Journal, the deal is not yet final, as U.S. District Judge R. David Proctor of Birmingham, AL, who presides over the case, must approve the arrangement. Additionally, the boards from each of the 36 BCBS plans must endorse the settlement.

Under the draft settlement, each of the 36 BCBS insurers can no longer be restricted to a little-known rule that required two-thirds of each Blue plan’s national net revenue from health plans and related services come from Blue-branded business. This rule limited each company’s ability to expand and open new growth pathways for each insurer. Theoretically, each Blue plan could maximize profits both in and out of their assigned service areas, causing greater competition in new territories, if desired.

As for the $2.7 billion settlement, the BCBS Association and all 36 independent Blue plans have agreed to chip in money to settle antitrust charges. Presumably, the amount will be apportioned based on the size of each Blue plan.

What Will This Mean to Iowa and Elsewhere?

Assuming the settlement is approved by Judge Proctor and all 36 Blue plans, there could eventually be more consolidations between Blue plans and non-Blue companies. Additionally, the largest of Blue plans, Anthem and Chicago-based Health Care Services Corp., would likely expand into other territories that were otherwise off-limits to them in the past.

In addition to having access to Wellmark products, eligible Iowa-based employers would have access to other Blue plans desiring to enter Iowa. Wellmark, on the other hand, could expand into other states, hoping to grow new members and revenue. Conceivably, Wellmark could purchase other smaller Blue or non-Blue organizations, or possibly be acquired by a suitor.

With this settlement allowing more Blue plans to enter new territories or states, insurance premiums in those markets could possibly fall. But it’s unclear whether increased competition will push larger discounts from local hospitals and health systems. Over time, this settlement may prompt enough consolidations that some geographical markets could become less competitive, not more.

Healthcare providers, specifically the American Hospital Association and American Medical Association, will have keen interest in how this settlement will eventually affect the revenues and practices of their own respective members at the local level. Additionally, how will state and federal exchanges be affected by this settlement?

In the end, will having additional Blue plans competing in Iowa make us happier because of increased competition? I’m not quite sure. Any unintended consequences will need to be thoroughly assessed as this settlement plays out over time.

With that said, this will be one interesting situation to follow in the months (and years) ahead.

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Making ‘Mentorship’ a New Employee Benefit!

Mentorship - An Employer Benefit StrategyMost of us can name at least one person in our lives that served as a ‘mentor,’ whether it was to help guide our career(s), aid in specific work projects or provided general life advice.

Oftentimes, this mentorship process is informal. It’s derived from the trust we have in the person due to his/her relationship, experience, knowledge, integrity and sense of altruism selflessly demonstrated to guide our own personal or professional development. The mentor simply wishes to share their knowledge or expertise with the mentee with the noble intent of “paying it forward.”

Mentorship is a commitment that requires valuable time and attention to assure the mentee’s goals are progressing as desired.

I have been extremely fortunate and consider both my parents cherished mentors, for many obvious reasons. They each held a ‘positional power’ on an adolescent boy who was very impressionable by their actions, not just by their words. They consistently demonstrated the value of serving others without seeking recognition. What I learned from them goes well beyond this blog.

Another immeasurable mentor was my father-in-law, a gentle and unassuming man who had incalculable wisdom for all who knew him. At times, the world can seem cold, dark and threatening, but his ultra-positive approach would magically lift my spirit with his infectious smile, humor and his approach that one must not take himself/herself too seriously – regardless of the circumstances. He shared applicable (and comedic) stories, using advice, wisdom and know-how, uniquely drawn from his vast business knowledge, both as an inventor and business owner. Invariably, he would end our discussion by saying, “This too will quickly become yesterday’s news – have patience and move forward!”

Finding a trusted mentor outside of personal relationships can be tricky. However, many successful organizations cultivate formal mentor programs internally to serve a variety of specific objectives that include grooming new potential leaders, acclimating new employees, developing skills, enhancing diversity and retaining employees.

The benefits of having a formal mentorship program can include:

  • Career Development – Aligning organizational goals to personal career goals. Feeling engaged and respected, the employee is given the ability to advance professionally within the organization, leading to higher retention rates.
  • High-Potential Mentoring – Retaining top-talent employees who have leadership potential and stay engaged within the organization.
  • Knowledge-Transfer Mentoring – Transferring specific skill-set knowledge to younger employees.
  • Diversity Mentoring – Bringing in new ideas by empowering diverse employees to share ideas, knowledge and experience to expand and innovate cultural awareness within the workplace.
  • Reverse Mentoring – Younger employees mentor older generations about new trends, allowing senior employees to see things from a fresh and different point of view.

Offering a workplace mentorship program is akin to offering another key benefit to employees. This benefit is definitely a win-win for both the organization and its employees.

Evolving technology now allows organizations to effortlessly connect employees with mentors. Past challenges, such as employee location, is no longer a barrier. In fact, smart technology serves to disrupt the ‘path of least resistance’ mentality of simply doing nothing.

MentorString™, a cloud-based software platform developed by Urbandale-based Prositions, Inc., is doing some very clever (and intuitive) things within the employment mentorship world. The usability features found within MentorString are straightforward and quite simple to use. Some of the features include visualizing how people are connected with one another by using a revolutionary tool called String Diagrams. In addition to many other carefully-designed accoutrements, users have access to individual action/development plans, discussion groups, media and file sharing. Prositions CEO Frank Russell and his team are constantly finding valuable approaches to mask the complexities organizations face in the ever-evolving employment world.

As the unemployment rate continues to move downward, a greater need develops for organizations to embrace mentorship programs. As I write this, I realize that offering a formal mentorship program should be yet another benefit to monitor in our annual Iowa Employer Benefits Study©.

A powerful benefit, no doubt!

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