Health Rift Could Infect Area Economy

August 16, 2002
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GRAND RAPIDS — If the Grand Rapids Area Chamber of Commerce had its way, officials from Spectrum Health and Blue Cross Blue Shield would be seated at a table today signing a new agreement.

“Obviously, we’re very, very concerned,” said John Brown, GRACC president.

“I’ve had conversations with many of our board members and collectively I think what the reaction is and our official position is, is going to be to urge Blue Cross and Spectrum to stay at the table, to do the hard work necessary to achieve an agreement and resolve this as soon as possible,” he added.

Brown hopes both sides come together before Sept. 1, the date Spectrum has set to drop the Blue PPO and POS plans, and not just for the chamber membership — but also for the economic future of the metro area.

“This is very unsettling for Blue Cross Blue Shield subscribers, and this is not good for the economic environment of West Michigan,” he said.

Brown said the short-term concern is that business owners will have less confidence in their employee health-care plans when these can be changed abruptly in mid-year. He said better than a third of the chamber’s 3,200 members subscribe to a plan offered by the Blues, the state’s largest and only nonprofit insurer.

Blue plans are attractive to chamber members because employees like the coverage these offer and the insurer insures workers that other insurers may reject because of pre-existing conditions. Brown said those two Blue factors allow companies to sign with just one insurer.

The chamber’s long-term concern is that a rift between Spectrum, the region’s largest health care system with a 70 percent share of the market, and Blue Cross, the insurer of last resort, could cripple the region’s potential for economic improvement.

“When the coverage of the insurer of last resort is not being honored by the major health care provider in the community, then those organizations or businesses, which either are looking to expand or to investment, would likely choose to go elsewhere for that, where you don’t have that kind of crisis,” said Brown.

In less than two weeks, Spectrum may stop honoring the Blues PPO and POS plans at its Butterworth and Blodgett facilities and at Hackley Hospital in Muskegon. The traditional Blue plan might not be accepted at Butterworth and Blodgett on Nov. 1 and at Hackley on April 1 if an agreement isn’t reached.

The dispute is over reimbursements. Spectrum wants a 15 percent increase from the Blues for its Grand Rapids hospitals and a 30 percent hike for Hackley. Blue Cross said the price demands are too high.

Brown said the Blues and Spectrum have actively supported chamber initiatives, and that the chamber has encouraged both to settle the conflict.

“It’s really not for us to judge the validity of the arguments on either side at this point. It’s simply to say that I’m sure both the Blues and Spectrum genuinely are taking positions they feel are just and honorable, and that’s actually part of the problem,” said Brown.

“It makes it more difficult for both sides to achieve agreement when they both feel justified in their positions and are quite far apart.”           

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