Health Insurance Mess

Eastern Long Island, where I live, is a microcosm of the health insurance mess in the United States.

In recent days, residents have been receiving a draconian notice from Empire BlueCross BlueShield, the area’s largest health insurer and a division of the biggest health insurer in the nation. “Important Hospital Termination Notice,” it’s headed.

It advises Empire Plan members that unless an “agreement” is reached with the three hospitals that serve eastern Suffolk County, “effective August 1, 2009” each of the hospitals “will no longer be a participating provider with Empire BlueCross BlueShield.”

Empire members would have to pay “out of network” at Southampton Hospital, Peconic Bay Medical Center in Riverhead and Eastern Long Island Hospital in Greenport, except for a few categories including “cases of emergency.”

The Empire letter gives a list of “alternate hospitals”—many miles to the west—including Good Samaritan Hospital in West Islip, Huntington Hospital, St. Catherine of Siena Hospital in Smithtown and Southside Hospital in Bay Shore. Consider the trips of many miles from Montauk or East Hampton or Southampton or Shelter Island or Riverhead to and from these hospitals, especially for the sick.

Importantly, Stony Brook University Medical Center—the tertiary care hospital for Suffolk, the place where the most serious and complex medical care is provided—is not on the list. That’s because Empire hasn’t settled on rates with it either, so Empire is getting set to cut off Stony Brook also on August 1.

It’s a health care outrage. People and businesses and government entities are paying great amounts of money for Empire Plan insurance. Hospitals are struggling. Meanwhile, health insurers are making huge profits. The Empire plan is no longer that non-profit mainstay of health insurance in New York State. Five years ago, it was gobbled up by a for-profit company based in Indianpolis, Indiana called WellPoint.

WellPoint, notes Paul Connor, president and chief executive officer of Eastern Long Island Hospital, reported profits last year of $2.5 billion.

Connor, chairman of the East End Health Alliance—a grouping of the three East End hospitals—said the three simply “want to negotiate fair rates” from Empire. There’s a “mismatch,” said O’Connor, in the combination of non-profit hospitals and the for-profit health insurers. It’s a mismatch that has become the basic health care combination in the U.S.

(The other major health insurance entities in this region, GHI and HIP, also switched to becoming profit-making entities in recent years joining into EmblemHealth.)

Kevin Dahill, head of the Nassau-Suffolk Hospital Council, which represents 24 hospitals, said what is happening to the three eastern Suffolk hospitals and Stony Brook is “not an isolated event.”

The health insurers should function as “someone in the middle to broker” between health care providers and employers who buy health insurance for their employees or the employees themselves. But that’s not the case as health insurers have “risen to a level of dominance.” He said: “It’s like you selling your house and the person who walks away with most of the money is the real estate agent.”

“It’s an absurd business,” said Dahill.

It is, yes, wholly absurd—and life-threatening. The health and lives of millions upon millions of Americans are at stake as the private health insurers grab 30 to 40 percent of the money they receive—and on eastern Long Island and elsewhere focus on short-changing hospitals, doctors and patients to get their profits higher. (In comparison, non-profit Medicare has 5 percent overhead.)

The “termination” which Empire is threatening the hospitals should instead be what happens to Empire. It and the for-profit health insurance companies that have become central to health care in recent years should be eliminated.

The sensible solution now being debated nationally is for the U.S. government to create a single-payer or “Medicare for-all” national non-profit health care program. Polls show a large majority of Americans, and their doctors, support this. Meanwhile, the for-profit health insurance industry is fighting back—while undercutting health care here and everywhere else in America.

Getting in touch with your representatives in Congress and offering your view would be important.