Taking on Blue Cross
When a Michigan firm devised a plan to help Ford Motor Co. cut costs on physical therapy, it drew fire from the state’s largest insurer — and showed how tough it is to revamp health care… Blue Cross used its position as the state’s dominant insurer to try to crush TheraMatrix as it worked to also sign up Chrysler and General Motors.
“They tried to destroy us,” says Robert Whitton, a physical therapist who founded TheraMatrix in 1981.
Full article on TheraMatrix’s lawsuit against BlueCross.
The way monopolies become monopolies in most cases is by managing to protect their turf.
Blue Cross doesn’t like competitors. What else is new?
TRUST BUST ‘EM
Since y’all’ve been on this before there were 111 of ’em: Where’s MY Waiver?
There is a sordid history of Blue Cross (or the hospitals using Blue Cross) getting state legislatures to give them a monopoly position in the health insurance field and bring the commercial insurers to pay hospitals the way Blue Cross paid – cost plus.
See John Goodman’s “Regulation of Medical Care; Is the Price Too High?“
In the 1990s, managed care exerted pressure on hospitals to get better discounts. In the decade that followed, hospitals consolidated to increase their leverage against insurers. What is likely to occur over the next few years is wave after wave of hospital and insurance company consolidations until both have a monopoly position that allows them to collude against the end users (i.e. employers and patients).
Maybe this is one of the many reasons 501(m) was passed in 1986, and Blue Cross Lost its federal tax exempt status.
Don Levit