Highmark Blue Cross Blue Shield’s entry into the Northeast Pennsylvania insurance market will have a big impact on the future of health care in the region.
Brian Rinker, the health insurance giant’s senior vice president of the Northeast Pennsylvania region, recently spoke to BusinessWeekly about the company’s role.
He said he is not expecting health insurance rate decreases. But he said Highmark’s merger with Blue Cross of Northeastern Pennsylvania in June will allow the company to control or moderate rate increases over time.
The company’s goal is to be more efficient and control administrative costs, he said. He also thinks the joining allows the company to provide better access to quality health care and manage costs over time so savings can be passed on to consumers.
“With their resources and expertise as the fourth largest Blue Cross plan, they can share their best practices with us,” Mr. Rinker said. “Over time, we can manage premiums and costs better.”
Highmark Blue Cross Blue Shield provides health insurance coverage and administrative services to nearly 550,000 people in 13 counties of Northeast Pennsylvania.
In December, Highmark Blue Cross Blue Shield announced it revived ties with Delta Medix physicians. The agreement came after Delta Medix split from Highmark in September last year following failed negotiations over, among other things, physician reimbursements and contract length.
The deal restored coverage for about 13,000 Delta Medix patients. Since then, patient scheduling requests have been backed up and staff have been hit daily with patient inquiries about whether or not they now have coverage.
Michael Costello, faculty specialist in the Department of Health Administration and Human Resources at the University of Scranton, said he thinks it was a good idea for Highmark to revive ties with Delta Medix, a large group of physicians with specialties in urology, breast care, vascular surgery, otolaryngology, head and neck surgery, allergy, pulmonology, radiology and radiation oncology in Northeast Pennsylvania.
“The fact that they were able to mutually resolve their differences is a good thing because Delta Medix can provide coverage in these areas,” he said.
The Pittsburgh-based company serves members across the United States through its businesses in health insurance, dental insurance, vision care and reinsurance. It operates health insurance plans in Pennsylvania, Delaware and West Virginia that serve 5.3 million members and employ approximately 20,000 people.
“Highmark is doing business in a number of states and its coverage area far exceeds what Blue Cross of Northeastern Pennsylvania had to the extent that Highmark can take advantage of market information they have and attempt to negotiate rates that they believe are justified based on the coverage area,” Mr. Costello said.
He does not believe Highmark will always use its size to force doctors’ offices to lower rates.
“In some situations, they may attempt to reduce physicians’ rates and in others, they may increase physicians’ rates. It depends on the specialty,” he said. “A company like Highmark needs physicians in their network in a range of specialties to provide care to the people they insure.”
If any physicians or hospitals believe that a health insurance company is taking advantage of its market position to disadvantage providers, he said legal remedies are available.
Highmark Health Enterprise employs between 800 and 900 people in Northeast Pennsylvania at 19 and 70 N. Main St. in Wilkes-Barre as well as its ancillary businesses.
As part of the merger agreement, Highmark agreed to maintain operations and “substantial” staffing levels in the region. That was intended to protect employees for a period of time, Mr. Rinker said.
Five months after completing the merger, however, Highmark cut 60 jobs throughout its service area in Pennsylvania, Delaware and West Virginia.
Mr. Rinker said the company has been doing a “balancing act,” cutting some employees in an effort to control costs for customers, but growing the number of employees in other parts of Highmark.
“I feel good so far that we’re doing both: managing our costs along with exploring opportunities to grow jobs here,” he said. “When you become part of a larger company, you have less employees doing certain things but grow employees to support other parts of the enterprise. It comes down to business needs. There’s a talented work force here and that means a lot.”
Mr. Rinker said he believes the company will continue to grow and he said officials hope to occupy a vacant building at 169 N. Pennsylvania Ave. in Wilkes-Barre.
Date: March 20, 2016