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is CEO of the Children's Hospital
of Philadelphia
Horizon Blue Cross Blue Shield of New Jersey wants to become a for-profit insurance company. This requires both a healthy balance sheet and state government approval.
You will note that none of this has anything to do with the treatment of sick children.
Horizon has no good reason for its recent decision to deny New Jersey patients access to the Children's Hospital of Philadelphia, including our New Jersey facilities. Last month, after months of negotiations, Horizon notified lawmakers in Trenton that it would drop the hospital from its network.
Horizon's September surprise could disrupt the lives of thousands of New Jersey children and their parents, forcing them pay from their own pockets for much of the specialized pediatric care we provide - or to stop seeing the doctors they trust with their children's care.
Parents are worried, of course. We are working with many of them now to identify insurance carriers in their employers' benefits packages who continue to provide access to the hospital, its physicians and its facilities.
Some of Horizon's purported justifications for this decision raise questions.
For example, Horizon says it wants to get New Jersey residents to use New Jersey-based hospitals - which sounds reasonable enough, especially when Horizon is trying to curry favor with New Jersey legislators. The problem with that rationale is that the Children's Hospital of Philadelphia is one of the largest providers of pediatric specialty care in New Jersey - and that's care provided in facilities that are located in New Jersey.
In addition, one-quarter of the children admitted to our hospital in Philadelphia are from New Jersey. Our main campus in Philadelphia is the single largest provider of inpatient care to sick children from the Garden State - larger than any New Jersey facility. Our total economic impact across New Jersey last year was $593 million, supporting 3,434 New Jersey jobs.
We also work in conjunction with many hospitals in South and Central New Jersey. Some 1,767 New Jersey children sick enough to require the most advanced medical care in the world - that is, the toughest cases - were transported to our Philadelphia facility in 2007. Thousands more children were seen through our partner hospitals or our other facilities in New Jersey.
Horizon has told some policyholders that they can continue to use Children's Hospital, just not the facilities and physicians that are convenient to them in New Jersey. Other policyholders will not be able to access the hospital in New Jersey or Philadelphia.
Why, you might ask, does Horizon want to destroy a well-functioning system? It is not because our reimbursement rates have gone up, other than the customary annual increases for inflation. We want the rates to remain the same, but Horizon wants to cut them substantially.
Nor is it because we do not have good relationships with other insurers. Horizon wants to get rates below what its competitors pay.
And it is not because anyone has a problem with the care we provide.
Then what could be the reason for denying the best care to the parents whose employers have selected Horizon to provide health insurance? It's hard to tell for sure, but here are a few facts worth pondering:
Horizon has been agitating to change its nonprofit status for years. The decision could be made soon, and hundreds of millions of dollars are at stake.
Horizon already has a surplus of $1.7 billion, and it wants more so it can further impress Wall Street.
Horizon spends a billion dollars a year on advertising and administration. It needs lots of money to cover its non-medical expenses - those that don't benefit a single patient.
Should Horizon move to for-profit status, it could lead to significant stock options for its already well-compensated executives.
The Children's Hospital of Philadelphia provides the highest-quality care at a reasonable cost. You have to wonder what kind of cynicism it takes for Horizon to cut back on access to care at the same time it seeks to become a for-profit company. Doesn't it seem to be putting the potential needs of shareholders above the actual needs of policyholders?
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