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Blumenthal’s Unhealthy Choice
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Business New Haven
9/18/2000
By: BNH
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On September 7, state Attorney General Richard Blumenthal announced the state would file suit against four health-maintenance organizations: Anthem Blue Cross & Blue Shield, Cigna, Oxford and Physicians Health Services. Together they insure nearly two million Connecticut residents. Aetna, ConnectiCare and Medspan - other major HMOs serving Connecticut - were not included in the lawsuit.
We are troubled by Blumenthal's sidestepping both the marketplace and the political process by asking courts to decide how our current health-care system should operate.
Blumenthal's claim that the industry puts profits before people is a surefire emotional bell-ringer - but what does it actually mean? Profits at many HMOs have been less than stellar. Indeed, competition and a high percentage of claim payouts to premiums surpresses profit margins. Oxford, for example, racked up losses in the hundreds of millions of dollars, just a couple of years back.
Under many insurance plans such as those offered to state workers (ironically, the state is suing HMOs it offers its own workforce), employees have a choice among competing companies. The majority of employees have consistently chosen from the companies Blumenthal is suing now.
In Connecticut particularly, regulation and legislation of insurance companies is a mature political process. All of the HMOs sued by the attorney general operate under laws of the state of Connecticut and a sophisticated insurance regulatory agency. Connecticut legislators have been leaders in carving out many consumer protections not found in other states.
Can the industry and legislators do a better job to assure Connecticut citizens the highest quality health care? Certainly.
However, we believe this is a job for the marketplace - tempered and managed by the political process, not the courts. The HMO industry is not the tobacco industry.
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