The Blue Cross We Bear

...Low-risk groups obviously bebefit from an experience rating, since the rate charged them would not reflect the high hospital utilization of poor-risk groups...

...Blue Cross thus has the position and the power to play a major role in coordinating the health interests of these various sectors...

...For another, Blue Cross has great influence in the planning of medical-care facilities...

...By subdividing the communityrated groups into several experience...

...As the representative of the International Union of Electrical Workers said at the hearings on the New York rate increase: “Why hasn’t AHS [Blue Cross] been the voice of the consumer...

...AHS President Douglas Colman attacked those who shed “crocodile tears” for the direct-pay subscribers, flailed at those who want to wave “magic wands,” and disparaged those who made basic critiques of the Blue Crosshospital axis: “Both the people and their government are threatened when the true dissenters, those who want to improve something, get out-shouted by the phony dissenters, those who want to destroy the whole business...

...Three are big businessmen (Consolidated Edison, International Nickel, and Federated Mortgage Investors...

...The whole point, of course, is that what the hospital administrators are doing is entirely legal...

...One measure of Blue Cross’s importance to these programs is that more than 90 per cent of the hospitals’ Medicare bills are paid through Blue Cross...

...For example, the hotel-services component (meals, linen, etc...

...Blue Cross officers sit on local, state, and federal government councils on health issues...

...And the constant tampering with Medicaid eligibility criteria and reimbursement rates has wreaked havoc on hospital finances...

...Federal Prospects Periodic gusts of public dissatisfaction have not slowed the impressive growth of Blue Cross...

...The hospitals say what they need to cover their costs, and Blue Cross pays up...

...The public gets taken, nonetheless...

...Thus th6 political base for demanding major surgery in the health care system is beginning to emerge...

...In New York, for instance, Blue Cross wanted to follow the example of other plans by making certain subscribers pay part of the cost of their benefits themselves...

...The “Blues” are non-profit, tax-exempt organizations...

...For example, professional services such as those of the anesthesiologist, the radiologist, and the pathologist used to be included as part of the hospital bill and thus were covered by Blue Cross...

...The groups which remain in the community-rated category are thus increasingly those which use a lot of hospital care...

...Consumers do not now set priorities in the industry...

...The reason is that AHS is dominated by people with an interest in medical income...

...The record shows that it has turned into a major obstacle to decent health care for the American people...

...Well, you can’t use more hospital beds than exist, so the absolute upper limit on Blue Cross’s liability Is set by the number of hospital beds available to its subscribers...

...rated pools, Blue Cross was concentrating its rate increases on those most in need of services and least able to pay for them...

...The members of the first group use relatively little hospitalizationan average of $100 worth of hospital services a year...

...Blue Cross is the central mechanism for financing hospital care in America...

...This, it claims, has been significant in keeping costs down...

...Blue Cross reimbursements to hospitals cover the costs of hospital public-relations men and their staffs...

...has indeed “paid off” both for its subscribers and for the community at large...

...The second group is made up of 100 older, poorer machine operators in a garment factory...

...By its consistent supineness before hospitals, it has permitted a hopelessly antiquated and unbalanced medical system to survive...

...doctors’ bills, even in the hospital, are covered separately by Blue Cross’s companion organization, Blue Shield...

...In 18 states, Blue Cross is also the intermediary through which Medicaid bills are paid...

...Until recently, it was mainly the poor who were mistreatedor not treated at all-by the medical industry...

...Almost $7 billion a year passes through Blue Cross...

...Blue Cross was once a great social reform...

...The second group uses twice as much-$200 worth of hospital services a year, on the average...

...In other states around the nation, headlines this summer and fall have also told of massive rate increases for the hospital-insurance organization: 25 per cent in Connecticut, 44 per cent in New Jersey, 33 per cent in Rhode Island, other huge boosts in Massachusetts, Maryland, and upstate New York...

...However, what New York Blue Cross originally asked for provides a good guide to the thinking of the men who control hospital financing...

...The big Blue Cross is an inviting target...

...Health programs came wrapped in anti-poverty packages, along with housing, education, and welfare services...

...Blue Cross requested a 36-57 per cent rate increase for this group...

...Blue Cross asks for an outrageous amount, the charade of the hearing is played out, and the insurance commissioner grants a smaller, but still stupendous, increase...

...The rate increase of 43 per cent (Blue Cross had asked 50 per cent) was challenged in court...

...Belief that cost-cutting pressure on the hospitals will result from such negotiations is much like believing, with the AMA, that doctors can regulate physicians’ fees in the public interest...

...But to Blue Cross, regardless of the hospital’s efficiency, incurred costs are “reasonable”Blue Cross pays the bill...

...This category contains many disabled, retired, unemployed, and self-employed workers, plus workers in small, marginal establishments...

...The New York plan was one of the first to become committed to this policy...

...A petty example illustrates Blue Cross’s close relationship with the hospitals...

...In some places the planning agencies’ decisions are binding...

...Some of these people have never qualified for a Blue Cross group policy...

...Both mechanisms represent an attempt by Blue Cross to shift some of the risk of medical costs to the subscriber...

...the number of Blue Cross employees has doubled, to 34,000, since the birth of Medicare...

...The advantage to the hospitals of giving Blue Cross this special rate is that they are assured a stable income from patients who might otherwise fail to pay their bills...

...At present, Blue Cross has its sights set on controlling any future expansion of Medicaid or a national health insurance plan, both of which become more probable as the health crisis worsens...

...The alliance of Blue Cross and the hospitals was evident at the hearings held by the New York State Insurance Superintendent on August 4th of this year...

...Blue Cross pays the hospital in a manner very similar to the cost-plus basis used by the Defense Department to reward its contractors...

...This is what Blue Cross means by a cost-control measure that has “paid off...

...Blue Cross is a great proponent of this planning movement...

...It also is a guide to the future, for what Blue Cross is denied this year it is likely to get the next time around...

...President Nixon’s appointment of Walter McNerney, president of the Blue Cross Association, as head of the “Task Force on Medicaid and Related Programs” was read by many as auguring a proposal featuring Blue Cross management of Medicaid...

...In 1959 about half of the hospitals in the area refused to renew their contracts with Bluecross...

...Despite outraged opposition from labor groups, civic organizations, local governments, and just about everyone else who could remotely be considered a consumer, the rate increases roll ononward and upward...

...Experience rating has been available to these groups for some time now, and the groups remaining in the communityrated category are generally the highrisk groups...

...People yell when they are stuck with a rate increase, but there is no continuing public action and the clamor quickly subsides...

...As of late 1968, 30 of the 75 Blue Cross plans were actively supporting local health planning councils, and the Blue Cross Association was considering making such participation mandatory for all plans...

...But Blue Cross, the Medicaid of the middleclass, has been just as great a failure...

...Then he paused, reflecting on the series of cutbacks that have emasculated New York’s Medicaid program and conceded that they couldn’t rely on that, either...

...Blue Cross only pays hospital bills...

...It is clear that really substantial savings in the cost of hospital care depend on fundamental rationalizations of the planning and running of hospitals and, indeed, of the entire medical care system...

...Hospital utilization among AHS subscribers was appreciably lower than for those in other Blue Cross plans., . .This lower utilization reflects the active support AHS has given the concept of areawide planning for hospital facilities...

...Closeness between Blue Cross and the public agency that supposedly regulates it, encouraged by the possibility of reward with a prestigious Blue Cross position later on, is said to be quite common...

...The members of the larger communityrated groups would also have been hurt by the Blue Cross proposal...

...Subscribers are not stockholders in Blue Cross...

...The hospital expenses of the entire membership are thus shared equally by the high-risk groups and the low-risk groups...

...In fact, few Blue Cross plans still retain as large a fraction of their subscribers on community rates as does the New York plan...

...The other 10 trustees all come from the medical establishment...

...The head of the panel is Walter McNerney, president of the Blue Cross Association...

...For example, lawyer Thomas Thacher was New York State Superintendent of Insurance from 1959 to 1963...

...It has been estimated that as many as 20 per cent of the patients now in general hospitals could be treated just as well in these other ways, at great financial savings to the patient...

...Blue Cross is providing less and less for its subscribers, at an ever greater cost, while insisting that there are no alternatives...

...But the priorities set by the professionalsthose who control the hospitals, medical schools, and the AMA-do not coincide with the needs of patients...

...It ensures the hospital-supply John Ehrenreich is a member of a task force that is studying the organization and financing of health services, under the auspices of New York's Health Policy Advisory Center...

...Each plan is independent, providing hospitalization insurance in a certain geographical area, usually a state or city...

...This amount, $110 (plus administrative expenses, of course), is what Blue Cross would charge each person in the community for insurance against hospitalization...

...Thus, without any change in the language of the Blue Cross contract and without state regulatory action, subscribers are getting less and paying more...

...This, however, represents a fundamental challenge to the power of the men who presently plan and run the hospitals...

...in others, only advisory...

...In addition to New Yorks AHS, for example, the Connecticut Blue Cross Plan has recently filed for permission to institute a system of “merit rating,” i.e., experience rating...

...AHS is the largest of theplans, with about eight million subscribers...

...If Blue Cross fails to represent the public with respect to the hospitals, the public agencies which regulate Blue Cross don’t help much either...

...In North Carolina and in some other plans, the medical society and the hospital association choose their trustees, and those trustees, in turn, choose the public representatives...

...But Blue Cross has grown up into a monster...

...The social aspect to Blue Cross is thus forgotten...

...Now the middle class is feeling the pinch, and doubtless its members will not be so stoical about their own suffering...

...The number of Americans who are medically indigent is rising rapidly...

...In 1967, it paid directly about 36 per cent of the bills for patient care in voluntary hospitals in southern New York state...

...Blue Cross is a powerful community force...

...The differences cannot be accounted for simply by differences in the scope of service offered at various hospitals, because the variation existed in every component of hospital costs...

...The promise implicit in federal financing has already been glimpsed by the industry itself...

...is one of the many liberal features of your contract...

...Under these circumstances, it is rare to hear a critical voice on the board...

...It behaves like a hungry corporation, the difference being that its “profits” are plowed back into the business...

...Blue Cross’s defense against its critics holds water only if it is true that Blue Cross is powerless and that the increase in hospital costs is inevitable...

...New York Blue Cross requested permission to divide the communityrated subscribers (currently about 60 per cent of the total Blue Cross enrollment) into three major categories: directpay subscribers, subscribers in groups of over 100 members, and subscribers in groups of under 100 members...

...Blue Cross gets what it expected and the public is led to think that the regulatory agencies are really looking out for consumer interests after all...

...Blue Cross does not pay the hospital’s bill to the individual patient...

...Both politicians went into court to block a proposed 50 per cent increase in the rates charged by New York Blue Cross...

...The hearings, they say, were merely group therapy for the opposition...

...The New York State Insurance Department refused to cut the 120-day contract but allowed a 30-65 per cent rate increase...

...In fact, the only alternative for these people was to go to the municipal hospitals-and then welsh on their bills...

...In the example above, the employees of the bank would be charged $100 a year, and the employees of the garment factory $200 a year...

...The state denied permission to separately rate large and small groups and granted rate increases of 35-63 per cent for the various contracts...

...In the last decade, prodded by federal legislation, regional planning agencies for health facilities have sprung up throughout the country...

...Medicaid has played a major role in boosting doctors’ fees and hospital bills into the stratosphere, while failing to cover the costs of medical care for anyone whose income is above the welfare level...

...It tried to impose a reimbursement formula on the hospitals which would force them to operate more efficiently...

...Nixon, the health crisis may change complexion and move to the suburbs, where a whole new constituency of frustrated consumers is waiting...

...Another example is a Pennsylvania Insurance Commissioner and his daughter who were given posts with the Blue Cross Association in the mid-1950’s...

...All of the proposals except the rise in rates were turned down...

...In recent years, however, Blue Cross has started acting more like such private, profit-making insurance companies as Aetna and Metropolitan...

...J. Douglas Colman, president of Associated Hospital Service of New York, explains: "Small groups [i.e., the better risks] must be protected from being forced to subsidize large, self-selected groups [i.e., the poorer risks...

...These agencies are supposed to scrutinize all plans for new hospital construction, as well as plans for modernization or expansion of existing facilities, in order to prevent unnecessary duplication...

...The rate would be calculated on the basis of the hospitalization experience of the entire community...

...Blue Cross guarantees its subscribers to pay for X days of hospitalization...

...Blue Cross coverage applies essentially only to hospital care...

...But the operations of Blue Cross are not limited to its role as the largest private financier of hospital care...

...So if any substantial number of hospitals in a given area took this course, Blue Cross would have either to pay the hospitals their full charges or else default on paying full benefits for patients in these hospitals...

...Blue Cross’s failure to control hospital costs for its subscribers simply reflects the political reality that Blue Cross is controlled by the hospital establishment...

...This is the way Blue Cross described its position on health planning in New York when it filed with the State Insurance Commissioner: There is clear evidence that the amount of hospital care, and, therefore, the community’s total hospital bill, including that of AHS [New York Blue Cross] subscribers, is materially influenced by the amount of hospital facilities available for use...

...Liberals inside the medical establishment, like Robert Finch’s abortive appointee, Dr...

...The attempted shift by Blue Cross to experience rating is not confined to New York...

...The typical plan provides for a self-recruited board of trustees on which the medical industry holds a majority of seats...

...But this fall, faced with skyrocketing medical costs and the evident failure of both existing federal programs and Blue Cross to provide for the nation’s health needs, he turned about and appointed a blue-ribbon panel to study national health insurance plans...

...Of course, Blue Cross claims that it scrutinizes hospital bills carefully and will only reimburse the hospitals for “reasonable” costs...

...What’s in it for Blue Cross...

...It is pricing itself out of people’s reach, first with old people, whom it happily relinquished to Medicare in 1966, and now with lower-income people...

...He enclosed a copy of the filing and a lengthy questionand-answer sheet explaining it...

...Blue Cross has its eyes out for any further expansion of government’s role in financing health care...

...Rather it funds the intermediary-usually Blue Cross-which in turn pays the hospital...

...This puts Blue Cross in a key position to determine how the federal programs are run...

...Monsignor James Fitzpatrick, president of the Greater New York Hospital Association (a league of voluntary hospitals) and director of the Catholic Medical Center (and of Blue Cross) heaped scorn on the opposition...

...neither law nor custom gives them any say whatsoever in how Blue Cross is managed...

...The plans also provide most of the machinery for operating the Medicare and Medicaid programs-that is, they act as “intermediaries” between the government and most hospitals...

...What Blue Cross Wants These charges apply to all of the Blue Cross plans, to a greater or lesser extent, and are illustrated by the New York plan, called Associated Hospital Service...

...Blue Cross proposed raising the rates as much as 84 per cent for this group...

...And, at the center of that system-paying the bills, planning new programs, manipulating both public and private health policy-is Blue Cross...

...voluntary community service groups...

...In opposition to the Blue Cross proposal was every group that could be construed as representing consumers: unions, such as the International Union of Electrical Workers, Teamsters Joint Council 16, the Drug and Hospital Workers, and the Sanitationmen’s Union...

...In this role, it acts as the collective representative of the long-term interests of the hospitals...

...Worst hit by this method of setting rates ,would have been the direct-pay subscribers...

...Saving” on Hospital Beds Blue Cross has undertaken energetic action to control costs in one way...

...Like such other “nonprofit” institutions as universities and medical schools, Blue Cross is forever seeking to expand its operations...

...In its request to the state, New York Blue Cross has essentially sought to abandon “community rating” and shift to “experience rating...

...In their wake, for the first time in two decades, can be heard a serious call for government-financed compulsory national health insurance...

...The rest are educators and cultural figures who do not represent anyone except themselves...

...Suppose there are two groups of Blue Cross subscribers in a community...

...The influence of Blue Cross’s origin can be seen today in the way the plans are run...

...and the New York City Department of Consumer Affairs and Department of Health...

...It ensures the urban medical schools and their affiliated hospitals that their research and training priorities will not be challenged by their sources of financing...

...By its abdication of responsibility for controlling medical costs, it is allowing everybody but the wealthy to be priced out of the medical-care market...

...Together, the Blue Cross plans provide hospitalization insurance for 68 million Americans, as well as insurance supplementary to Medicare for another 18 million people over age 65...

...They are usually set up under special state legislation ,which exempts them from certain provisions of the state insurance laws but which subjects them to regulation by a state agency, often the state insurance department...

...The power of the hospitals stems also from the nature of their contracts with the insurance organization...

...But governmentfinanced health insurance would also make it possible to avoid grappling with the basic problems of the industry...

...One city doctor has cancelled his Blue Cross coverage...

...Even the trademark “Blue Cross” is owned by the American Hospital Association...

...And nothing more than that is likely to come out of a group headed by a Blue Cross official...

...The reasons lie in how the organization perceives its dual relationship with the public on the one hand, and with the providers of care on the other...

...President Colman of AHS was asked at a recent state legislative committee hearing what would happen to the people who could not afford the higher rates...

...The prospects for Blue Cross are rosy...

...And if hospitals are so crowded that you can’t get in immediately, he reasoned, you may be just as well off recuperating at home-if you live...

...As a result, tens of millions of Americans with low or middle incomes have been effectively priced out of the medical-care market...

...Finally, Blue Cross has distorted medical practice...

...The day after Blue Cross filed its rate increase proposal with the State Department of Insurance, a letter went out from Blue Cross Vice President Mark A. Freedman to administrators of its member hospitals...

...For example, Raymond Corbett, president of the New York state AFLCIO, has pointed out that in New York City there are 15 open-heart-surgery programs, seven of which do 83 per cent of the heart surgery, while the other eight do only 17 per cent...

...The exact rate of payment is negotiated between the hospitals and the intermediary...

...For example: * Blue Cross reimbursements to hospitals cover the cost of hiring laborrelations lawyers and consultants to help keep hospital employees from organizing themselves into unions...

...Speaking in support of Blue Cross were only the hospital administrators...

...For one example, it finances essentially only inpatient benefits: thus ambulatory care, preventive medicine, and extended home care have received short shrift...

...There are other elements in the “reasonable” costs which Blue Cross does not see fit to control...

...New York has 13 “consumer” representatives on its 23-member board, but few of them look even remotely like spokesmen for the subscribers...

...Until now, the public has not exerted any effective pressure on either the regulators or Blue Cross itself...

...Either course would destroy Blue Cross’s competitive position with respect to the commercial health insurance companies...

...At the same time, it proposed to eliminate the previous contract, which provided full benefits for 120 days, and replace it by a new contract in which the directpay subscriber would have to pay 33 per cent of the cost of his first 10 days of hospitalization and 20 per cent of the cost from the 31st to the 120th day...

...In May, 1969, AHS asked the State Commissioner of Insurance to grant it permission to raise rates andmakevarious changes in its way of operating...

...No less than eight Blue Cross trustees and officers sit on the HHPC Board of Trustees (five of them are HHPC officers as well...

...There also remain glaring deficiencies in the benefits offered by present contracts...

...Those problems have to do with priorities and power...

...companies and drug companies of a stable market...

...What this means to the consumer can best be explained by example...

...To the charge that not all of the money the hospitals receive is used for patient care, he gave the lessthanrelevant answer: “When was the last time you heard of a hospital administrator taking off for South America with a suitcase full of negotiable securities...

...they are in the position of representatives of the poor chosen by city hall...

...But Blue Cross potentially has tremendous power to force hospitals to operate efficiently and rationally...

...Now that the medical guilds have learned that federal subsidy means more floods of money for them to allocate as they see fit, the cry of “socialized medicine” is no longer heard in the land...

...They have become more vocal, but the great middle-class majority has proved itself able to bear the sufferings of the poor in silence...

...In at least one instance, hospitals have made successful use of this weapon...

...What regulation of medicine exists in the nation has followed the familiar pattern in which the regulatory body is captured by those it is supposed to control...

...Blue Cross is regulated at the state level, but, as we have seen, the regulators have not used their powers to promote reform of the medical delivery system...

...Stewart had, to be sure, turned down many of Blue Cross’s proposals and trimmed its rate proposal...

...Confronted with a national crisis in medical costs, Blue Cross pleads not guilty...

...In the example, the 1,000 people in the community use a total of $110,000 a year in hospital services (900 people at $100 a year plus 100 people at $200 a year) or an average of $110 per person per yaer...

...In the New York region, this influence has led to an acute shortage of hospital beds...

...Although the government ultimately pays the bill for medical services offered under Medicare and Medicaid, it does not ordinarily pay the hospitals directly...

...After prolonged negotiations, Blue Cross knuckled under and abandoned the costcontrolling payment scheme for a plan based on “full and equitable” cost of each institution...

...In other words, Blue Cross has done its best to make hospital beds hard to find...

...And this is exactly what Blue Cross has shown itself unwilling to do...

...Blue Cross critics allege that during his term in the Insurance Department, Thacher was extraordinarily sympathetic to some of Blue Cross’s legally more questionable demands and practices...

...For millions of Americans, faced with economic catastrophe if they got sick, it has meant that their hospital bills are in large part paid for...

...As intermediary for Medicare, an additional 32 per cent of the hospitals’ total reimbursement passed through Blue Cross’s hands...

...He is co-author, with his wife Barbara, of Long March, Short Spring: The Student Uprising at Home and Abroad...

...The man from Con Ed, Vice President Charles Delafield, became a trustee when Blue Cross, in one of its great business coups of the 1950’~s,o ld Con Ed an experience-rated contract before the legality of such contracts had been ruled on by the State Insurance Department...

...varied from $9 to $20 per day, and the nursing-services component varied from $12 to $23 per day...

...Each of these pools of subscribers would then be experience-rated...

...Rather, it has a contract with the hospital specifying that Blue Cross will pay the hospital a certain “allowable cost” for each day of hospital service used by a Blue Cross subscriber...

...Connecticut Blue Cross gives you a demerit if you get sick...

...The hospitals created it during the depression to ensure that their bills would be paid...

...In no case do the subscribers have a vote in choosing the trustees...

...There is something gravely wrong with the American health system...

...For example, maternity care is essentially not covered, although this is the most common reason for hospitalization among young women...

...AHS now offers groups of more than 100 members the option of being "experienced rated...

...Others were covered by a group policy in a former place of employment, but upon leaving their jobs received a notice from Blue Cross saying: “The privilege of continuing your protection regardless of your employment status...

...Such charges are called “deductibles” when the subscriber pays the first somany dollars of his bill...

...National health insurance is a liberal panacea that has become obsolete before it has gotten off the drawing board...

...If you have a heart attack, he pointed out, the first 24 hours are crucial...

...Three months later, Blue Cross had still not seen fit to notify its subscribers that a rate increase was in the works...

...One measure of Blue Cross’s failure to do what it claims, however, is the fantastic variation among hospitals in the cost of providing the same services...

...Federal programs account for almost half of Blue Cross’s operations...

...The politics of medicine are changing, however, and therein lies the consumers’ best hope...

...In New York City, health has already become a middle-class issue...

...There are 75 Blue Cross plans in the United States...

...And in the recent Blue Cross court cases in New York, a state supreme court justice summed up relations between Blue Cross and the Department of Insurance when he scolded State Insurance Commissioner Richard Stewart for his “arbitrary, capricious, hasty, and ill-advised” approval of the rate increase Blue Cross had sought...

...New York Blue Cross itself has provided figures showing that in-patient per diem costs in New York teaching hospitals in 1967 varied from $48 to $89...

...One reason for the Presidential interest in health insurance is the increasingly evident failure of Medicaid, which has been little short of a disaster...

...With the exception of the American Medical Association, no single agency, public or private, has ever had such a grip on American health policy...

...Thacher now sits on the board of New York Blue Cross...

...It was this policy of charging a community rate, more than anything else, which won for Blue Cross its reputation as a community service rather than just another insurance company...

...Hence, through its participation in planning councils, Blue Cross seeks to limit the number of hospital beds in the area...

...The task force was also charged with making proposals for a national health insurance system...

...Individual plans are in some cases making more direct cuts in service...

...at this writing, the matter has not been resolved...

...John Knowles, and outsiders like Walter Reuther, see government subsidy as answering the consumer’s immediate need for help in financing his health needs...

...Under “ community rating,” Blue Cross would charge the members of both groups the same rate for hospital ininsurance, even though the risk associated with individuals in the two groups would differ...

...President Nixon has opposed government-financed national health insurance schemes ever since, as a freshman Congressman, he fought against President Truman’s proposals...

...Five are labor leaders, but at least two of them are from unions which have few members covered by Blue Cross...

...According to Health, Education and Welfare officials, the plan that is likely to emerge would use federal money along with payroll taxes on employers and employees to buy insurance from private companies...

...Four years ago the New York Governor’s Committee on Hospital Costs noted that the number of high-energyradiation units already installed in New York City was sufficient to serve a population more than twice that living in the region...

...This is called “co-insurance” or “co-pay” when the subscriber pays a certain percentage of the bill...

...they are told that is a matter for the health professionals...

...Blue Cross ensures the hospitals that they will have a reasonably stable income...

...Me replied that they could fall back on Medicaid...

...Under Mr...

...In 1969, average occupancy rates in voluntary hospitals in New York City soared into the 90 per cent-and-up range, the highest in the country, and it became difficult to get a hospital bed even in emergencies...

...many have no community-rated contracts at all...

...Benefits do not generally encourage use of outpatient departments or other ambulatory care, nursing homes, chronic care homes, organized home care, etc...

...Its trustees sit on business, university, and hospital boards...

...Blue Cross, with its favored position in the hospitals, would have the inside track and a good prospect of monopolizing the business...

...One group is made up of 900 generally young, white-collar workers in a bank...

...What fails to make Blue Cross's defense persuasive, however, is the fact that hospital costs are not rising like the price of meat or clothingthey are rising at three times the rate of the Consumer Price Index...

...But observers of past Blue Cross rate increase requests saw a familiar pattern...

...Thus national health insurance, in the absence of a reorganization that would give a voice to the consumer, would simply underwrite the present misallocation of resources...

...The first plan dates from 1929, but the big expansion was in the1930’s...

...Blue Cross reimbursements to hospitals cover the costs of unnecessary, underutilized, expensive, but prestigious programs and equipment...

...The common pattern is for doctors to hold one-third of the seats, hospital administrators another third, and “lay” representatives the other third...

...New York Blue Cross gives $100,000 a year to the Health and Hospital Planning Council of Southern New York (HHPC, the agency which, according to New York state law, must approve all projected hospital construction in the area), making Blue Cross HHPC’s largest non-governmental contributor...

...Blue Cross benefits are deteriorating all over the country for all groups...

...In the mayoral campaign, Mario Procaccino and John Lindsay, who had been tripping over each other for the white law-and-order vote, joined forces on at least one issue-Blue Cross...

...All of the plans are moving in this direction (if they’re not already there...

...The entire structure of the hospital system-its finances, its manpower policies, and often even its medical policies-rests upon Blue Cross as a base...

...The BlueCross We Bear by John Ehrenreich The Johnson-era health crisis was the political property of the poor...

...But, in recent years, these services have increasingly been billed separately, under the less comprehensive coverage offered by Blue Shield...

...These variations compel the conclusion that some hospitals are much more efficient than others...

...In Philadelphia in the late 3950’s, Blue Cross got uppity and put the longrange interest of its subscribers (and of its own finances) ahead of the immediate interests of the hospitals...

...Such items as research overhead, educational costs for a residency or intern program or for a hospital school of nursing, and the cost of providing service for patients who fail to pay their bills are not included in Blue Cross payments, although part of those costs would be included in the I bill of a person paying his hospital bill himself or with the aid of a commercial insurance policy...

...The plans are linked by the national Blue Cross Association, which represents them in national affairs, provides services in marketing, education, research, and professional and public relations, and operates an interplan “bank” which provides coverage for Blue Cross subscribers using hospital benefits outside the area of their own plan...

...Important insurance commissioners are also often invited to the annual Blue Cross Association meetings, there to be wined and dined in return for a brief speech...

...That kind of socialism is all right with the AMA...

...Thus the public trustees not only are in the minority, but they are chosen by the medical establishment...

...Nor does public regulation of the industry offer much hope...

...The allowable cost which Blue Cross will pay is not the same as the total cost to the hospital...

...It argues that it is merely the collection agency for the hospitals, raking off only a subsistence-level overhead for itself...

...AHS’s active participation in these activities...

...The result, in New York and elsewhere, is that when hospitals negotiate their reimbursement contracts with the Blue Cross, they are essentially negotiating with themselves...

...Thus Blue Cross, directly and indirectly, pays more than twothirds of the hospitals’ costs but makes virtually no attempt to control them...

...But it also means that the hospitals have an effective club over Blue Cross: they can withdraw the preferential rate they of’er to Blue Cross and demand that Blue Cross pay them their full charges...