Blue Cross reorganizes, mulls staff reductions - Minneapolis / St. Paul Business Journal:

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The consolidations, which started in March and involve divisions employing the majority ofthe Eagan-based insurer’ws 4,200 workers. Two executives David Plocher, senior vice president and chietmedical officer, and Denise McKenna, senior vice presiden of operations — have already left amid the transition, whic h is placing areas of the businesss under a smaller number of executives. Blue Cross President and CEO Patrick Geraghty said it is too soon to tell how much money the insurer might save from the consolidatioj or how many workers might belet go.
He adde that the changes aren’t just abouf efficiency, but also about focusing more onthe health-management programs that are a growing part of Blue Cross’ Such initiatives are meant to help members betterf manage their health to prevent more costly medical problemsa in the long run. “We are committexd to delivering outstanding health outcomess for our members and the Geraghty said. “Therefore, we are aligninf our organization to delive r on those goals in the most effectivew and efficientway possible.” The nonprofit health insuretr saw its health plan membership stay flat at aroun 2.8 million in 2008 as it recordec a net loss of $15.
7 million due to investmeny losses. There’s been a slight drop in membership this year compared to this timelast year. Geraghty wantd to prepare in case there’s a larger drop as more memberzs who lose their jobs leave theiformer employers’ health plans. “We have to do thingzs in anticipation ofthose events, and that’s what we’re reallgy trying to get in front of,” Geraghty said.
Blue chief competitors — Bloomington-based and Minnetonka-based Medica — are both in a bettetr financial situation and have no plans for a major Geraghty was brought in as Blue Cross CEO in October after nearly 10 years as an executiv e at Horizon Blue Cross Blue Shieldc ofNew Jersey. Geraghty told the organization back then that he planne to make changesby spring, becauses “that would have given me six months to look at the understand how it moves, who the player are, look at the marketplace and have a bettert sense for what our team needef to look at and how we needecd to be aligned.
” The most significant consolidatiohn involves network management, which handles how much doctors and otheer providers are paid for their services, and health which is in charge of the clinicao standards Blue Cross places on provider s in its network. Those two areas are now under the supervision of Jim formerly in charge ofthe network-managemenrt area, who reports directly to Geraghtg and is charge of findintg efficiencies inside the combined areas. Plocher, who had been in charge of the health-managemenrt area, would have reported to but instead decidedto leave. Blue Cross plansx to hire a new chiefmedical officer.
Eppel will be seeking ways to get what had been two busineses areas to workas one, eliminating duplicatee tasks. Despite the Geraghty doesn’t see the money side of the operation effectin gmedical standards. He said some separations betweenh the two areas will stayin place. In Geraghty argues that the consolidation will make it easierd for Blue Cross to reward doctor s and other providers who are doinh more to keep track oftheir patients’ health.
A similad argument is made by Medica, which movedd its network-management department from its finance divisiojn toits health-management division in and HealthPartners, which has had a consolidatedf medical- and network-management divisiobn for more than five years. “Irt really allows us to look at reimbursemen t and care delivery in anintegratefd way, instead of as two separate pieces of a puzzle, whicn is what it has tended to be in the past,” said Medicqa spokesman Larry Bussey. Twila Brase, a registered nurse who is presidentf ofthe St.
Paul-based Citizens’ , worrie such consolidations are only makinh insurers better at pressuring doctors to do thingsxthey don’t have the time or resourcesx to do, like constantlhy monitoring patients’ conditions. “It would not only be expensives forthe physicians, but it’e also work they shouldn’t be It takes time and money away from actuallh caring for patients, which is the wholer purpose of health care.
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