Newspapers / The Chowan Herald (Edenton, … / July 26, 1976, edition 1 / Page 9
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July 26, 1976 Blue Cross Curbs Costs, Speeds Service by JOHN COIT Financial Times Writer CHAPEL HlLL—Blue Cross and Blue hield of North Carolina sells health care lsurance to 1.9 million people in the state — early one-third of the population. When the government programs—such as ledicare and the military’s CHAMPUS are hrown in—the health plan covers nearly ne-half of North Carolina’s population. Operating out of its gleaming, angular ffices here, the non-profit organization and ■s 1,000 employees work toward administer ig the health plan’s 18,000 group and idividual policies. Nearly 85% of the people covered under Hue Cross and Blue Shield are in group plans, 'he balance hold individual policies. “We got into the health benefit service msiness early,” said H.C. Cranford, vice •resident for public relations. “We know our tusiness pretty well. We’ve learned to be nore efficient, deliver a quality product and irovide better service.” Cranford admits, without reservation, that he rates paid by Blue Cross and Blue Shield übscribers “are probably the highest of any lealth care plan. But we also deliver more and leliver it better than any other plan. “We try to keep up with what the people vho subscribe to our service want. We’re >utting in a dental plan. We've been mthorized to put through a major medical >lan (up to $250,000 for a catastrophic illness), ind we’re always attempting to improve in the irea of cost containment.” Cranford said Blue Cross and Blue Shield >aid back 94 cents on every dollar it took in ast year. Since the plan is a non-profit concern, it has no stockholders to pay, ower-than-usual salary ranges and other jenefits—but it does pay taxes on property, >remiums and other fees necessary to do msiness. Blue Cross and Blue Shield is not an nsurance company, Cranford pointed out. It is jrganized differently and operates under a iifferent law from profit-making companies. “When we determine what our rates are *oing to be we have to hold a public hearing yefore the insurance commissioner,” he said. ‘We are under the glass and we are being checked and audited to see if our rates are adequate and appropriate.” Health care costs, as everyone knows, have ilimbed sharply in recent years, rising much faster than the inflation rate. Hospital costs last year rose an average of 17% in the state, while doctors’ fees went up 12%. In 1975, North Carolina Blue Cross-Blue Shield paid 3,140,890 claims totaling 5406,838,172. That includes payments through govern ment plans it administers. Blue Cross through its private plan paid out $228 million in claims and grossed $246 million. Net income in 1975 was $1,140,000, compared to $4,507,000 in 1974. Fart of the sharp rises in hospitilization are rlue to major advances in medical technology and improved care, said Cranford. He pointed out that a hospital stay costs three times more than, say, 10 years ago. But he added that care is three times better and the typical hospital stay is one-third shorter. In the end. he said, the patient pays about the same thing for the same level of care as he once did. Cranford also offered some hope that the heavy cost of getting well is stabilizing. He said projections show that costs will increase about 8 10% this year—still high, hut much Carolina Financial Times ' f v . ~ , ill '*wmSL *.?■ /fv y BLUE CROSS-BLUE SHIELD OF NORTH CAROLINA operates oat of modern headquarters between Chapel HOl and Durham. The non-profit plan directly writes health insurance for about one-third of the state’s population. less than the trend of the past five years. According to the plan’s annual report, there were sizable increases in benefit expenses during the first half of 1975. The organization, under state law, must keep a three-month reserve of funds to pay claims —even if there is zero income. “The plan avoided a large loss of its state-mandated reserves by implementing rate increases on group accounts, which cover about 80% of all subscribers,” the report said. The state Insurance Department Jan. 1 approved a rate increase averaging 10%, the first Blue Cross rate hike since 1973. To save money, Blue Cross-Blue Shield has begun a strict cost-containment program — using its various divisions to analyze what it costs to provide benefits and ferreting out questionable claims and wasteful procedures. The organization also keeps a sharp eye on the bills which are presented for payment by the plan. Said Cranford: “We can and do challenge some of what comes in because we think fees and costs are too high, weren’t delivered or were mistakenly added to a patient’s bill.” The organization is trying to improve its relations with subscribers, said Cranford. Blue Cross and Blue Shield has started a program by which subscribers get a full summary of what the plan paid to hospitals and doctors for patient care and services. The plan has also begun an extensive health education program which it hopes will cut down on the amount of claims paid for services that could have been avoided. Blue Cross and Blue Shield also is attempting to get its subscribers to use out-patient facilities for minor surgery and health care—rather than to into the hospital for what could be taken care of in a clinic. TITLE INSURANCE lawyers Title of North Carolina, Inc. N BRUCF BONEY. JR W DUNLOP WHITE. JR CORNELIA McK TROTT F PRESIDENT EXECUTIVE VICE PRESIDENT CHAIRMAN OF THE BOARD VICE PRESIDENT CHARLOTTE OETICE WINSTON-SALEM OFFICE RALEIGH OFFICE 24 Hour Service from three otttces stalled by three North Cnroiina attorneys and fifteen experienced title personnel. I Lawyers Title Insurance Corporation, with capital, surplus and reserves of $67,225,152.00 now celebrating it's 4Bth year in North Carolina.) CHARLOTTE. N C RALEIGH. N.C. WINSTON-SALEM. N.C. And it is encouraging patients to get testing and pre-hospital work-ups done before admission, thus saving a day’s bill—which can be considerable. Follow-up care can also be conducted at the patient’s home by a visiting nurse, says Cranford. All together, he says, this could save the patient as much as 30-35% of the cost of being sick. The organization is also putting all its files on a computer with CRT terminals in each of the service centers across the state. That way, claims can be processed faster, benefits can be looked up in seconds and questions about benefit service can be answered with a minimum of waiting time, says Cranford. In general, Blue Cross and Blue Shield favors national health insurance—but on terms which would place the administration of it in the hands of the private sector. Blue Cross, in a position paper, says the program should be “jointly developed by government and the private sector with the private sector playing a role which utilizes its unique abilities to deliver services economic ally and efficiently.” Naturally, Blue Cross-Blue Shield wants a national health insurance program its own people have developed for the government’s consideration. It calls for universal health coverage, private purchase of supplemental coverage, retention of Medicare for the elderly, continuance of a free market and strategies to contain health care costs. Said Cranford: "Health care benefits-must continue to be first class and provide good service. It must be able to project what health care will cost and stay with it. And it must find ways to hold costs down.” Page 9
The Chowan Herald (Edenton, N.C.)
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July 26, 1976, edition 1
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