The changes roiling the healthcare industry in recent years make me think of "The Burning of Los Angeles," the apocalyptic painting that is the narrative center of the famous Hollywood novella The Day of the Locust. It's a sobering scene of reckoning, where "men and women fled wildly before the vanguard of the crusading mob."
I would like to replicate a far more benign version of this scene, not in the streets of 1930s Los Angeles, but in an office building near the corner of Beale and Mission in San Francisco, where Blue Shield of California is headquartered. I'll get to the how of that shortly.
The why is quite obvious: Blue Shield announced last week its intent to raise its premiums on individual policyholders by as much as 59 percent. That in turn raised the ire of regulators, activists and others in the community.
For the sake of full disclosure, I am a Blue Shield enrollee. My rates will be going up 25.5 percent. What particularly irked me is that I received two notices of increases: one initially for about 22 percent toward the end of 2010, and then a second notice this month bumping it up again in March. It had the effect of making Blue Shield look chagrined that it hadn't charged me enough the first time around, and was hoping I wouldn't notice.
"On average, our costs for our hospitals increased by nearly 15 percent ... costs for prescription drugs and physicians rose by 12 percent and 9 percent in 2010," Blue Shield explained in its matter-of-fact correspondence. "Rest assured, there are no changes to annual deductibles, coinsurance or out-of-pocket maximums for your plan."
The letter was sent on behalf of Douglas King, Blue Shield's vice president in charge of individual and small group markets. His auto signature contains only his initials, doubly reinforcing the notion he has little time for the likes of myself.
None of those figures quoted in King's letter even approaches the increase imposed on myself and other members, and seems to completely disregard the good health of my entire family. Moreover, recent federal data suggest that healthcare spending has slowed to its lowest rate in decades. These facts seem meaningless to Blue Shield.
But the meaning is abundantly clear to me: my household would now have to shell out a minimum of $11,100 out of our pocket in a calendar year before Blue Shield paid a dime of our medical expenses. If two of our family members became ill, it would zoom past $16,000. Those numbers leave me neither rested nor assured.
These rate increases are driven partly by the fact that within three years Blue Shield will have to compete with other plans on a state-run exchange. The unspoken fear is if insurers don't lock in staggering rate increases now, they won't be able to do so in a semi-transparent venue like an exchange.
Unlike Blue Cross of California, Blue Shield is a not-for-profit. But Blue Shield is rather cleverly constructed as a California nonprofit mutual benefit corporation, one of the very few health insurers in the state incorporated in this manner. That exempts it from making its tax returns available to the public, or having to disclose the salaries of its top executives.
As Blue Shield explained to me in correspondence last year, "there are many other California nonprofit mutual benefit corporations that are not tax-exempt and do not file a Form 990, including the Automobile Club of Southern California ... and any number of homeowners, professional and trade associations."
However, Section 7510 of the California Corporations Code requires such organizations to hold meetings of its membership, either in California or on the premises of its headquarters. As far as I can tell, Blue Shield has never held one of these meetings. For some reason it is not in the habit of telling its members they have the right to request one.
So, I am going to begin this process. Anyone else who is interested in adding their voice to this request can e-mail me, or do so on a Facebook page I've started for this purpose. If Blue Shield balks at its responsibility to hold a meeting, perhaps a picket or two at its headquarters might change its collective mind.
I would have many questions to ask at this meeting. I'm going to start with the compensation of Chief Executive Officer Bruce Bodaken, the ever-busy Douglas King and other members of the Blue Shield executive staff. I want to make sure my membership dollars aren't being frittered away, after all.
I would also want to make a motion that Blue Shield cannot raise member rates without seeking approval at another membership meeting. I don't know if that would violate Blue Shield's membership bylaws, but the attempt would be awfully amusing nonetheless.
Presumably, not all of Blue Shield's three million members would make it to this meeting. That's good, because it would no doubt cause a terrible spot shortage of folding chairs. Just a few thousand appearing would suffice.
Suffice for what, you ask? Such a meeting would send a message to executives of the nation's health plans that every time they jack up the rates of their members, they should not be permitted to do so in a vacuum. Doing so at such a remove means they are not confronted by the people who have to sweat to make those monthly payments, living in fear of what might happen to their families and homes should they no longer be able to pay that bill.
In other words, it may cause the top brass of health plans the same experience I have whenever I crack open Nathanael West's haunting work of fiction: discomfiture and reflection. - Ron