Thursday, August 21, 2008

NEPA Blue Cross gives away $45 million


Blue Cross donates $45 million to Commonwealth Medical College

A worthy project but is this what we pay premiums for?

As Represenative Phyllis Mundy previously said:

As you know, I’ve been an outspoken critic of the way in which Blue Cross of Northeastern Pennsylvania, a nonprofit insurer, has stockpiled surpluses while at the same time raising rates.This situation is somewhat different, however. In fact, I find the intent of these initiatives -- such as the creation of a regional medical school -- very admirable.


But, once again, as an overall policy and plan, hard questions must be asked: Is this an appropriate use of the surplus? What are the anticipated measurable results? Are any of the ideas proposed in the initiative better than simply using the surplus to hold or reduce premiums? These are fair questions that I believe deserve straightforward answers.

Blue Cross of NEPA is an interesting "nonprofit" company. The CEO and the other executives at the top of the food chain have salaries in the six figures plus bonuses and Bob Mellow and his fellow board members are paid $25,000 a year plus bonuses. The board members also get $1100 a meeting for some other duties. Nice work if you can get it.

3 comments:

  1. Hi Gort,

    You and I have been on this issue for a year and half:

    http://coalregionvoice.blogspot.com/2007/02/pennsylvania-and-colon-cancer-screening.html

    Also Capital Blue Cross gave a bundle to PSU Hershey for a Children's Hospital in order to be lone provider to all the PSU Hershey employees.

    Is this not a huge conflict of interest for Mellow? Collecting 40K for sitting on a "non-profit" Board. He also sits on the Senate Banking and Insurance Committee which legislates the PA insurance industry.

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  2. Anonymous10:27 AM

    I definitely have a problem with Mellow sitting on the board while acting as a senator, but the medical college is definitely a worthy project. The economic imact this school is having on the region is already felt, and will only get bigger over time. This college will be the leader others will want to follow. Their commitment to the community and to making local students a large percentage of their enrollment is admirable.

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  3. Anonymous10:40 AM

    BC of NEPA collects premiums to cover health care costs and the administrative costs associated with those functions. It is not up to them to give money to the new medical college or any other endeavor, no matter how worthy. why not rebate 45 million dollars to those actually paying premiums if they do not need it for the above two functions?

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