Fábregas: Strength not found in numbers at Highmark
By Luis Fábregas
Published: Saturday, Feb. 15, 2014, 12:01 a.m.
Dr. Bill Winkenwerder, CEO of health insurer Highmark Inc., exuded confidence this week when he spoke to reporters about the company's future.
He greeted us with a warm handshake and the obligatory small talk about the cold weather. It didn't take long for the big reveal.
“Highmark is strong. We're growing, and we are well-positioned,” he said in a meeting at Fifth Avenue Place as I took notes across from him. “We are now 37,500 employees strong.”
Fast-forward 24 hours. The ink from my notes was barely dry when Highmark quietly announced layoffs of 132 workers in information technology and sales departments.
Highmark is strong, I remembered.
I'm sure Winkenwerder had his reasons for not divulging the layoffs. No executive wants to break a cardinal rule of public relations: to keep the story straight. Talking about layoffs would have interfered with the mission of talking up Highmark's future at a time when things appear a little rocky.
To be fair, the number of affected workers was small, considering the 37,500 total count that he mentioned. Still, a layoff is a layoff, no matter how you couch it.
Winkenwerder focused most of his presentation on enrollment numbers for Highmark plans, including its Community Blue product that doesn't give members in-network access to UPMC facilities and doctors.
Turns out Community Blue has grown to roughly 180,000 members. Winkenwerder expects the number to reach 200,000 by April.
“People are flocking to Community Blue,” he said.
The interest in Community Blue is curious because everyone seems to be agitated about having access to UPMC hospitals. Highmark's contract with UPMC expires in December, and most people with Highmark commercial insurance will pay out-of-network rates if they want to get care from UPMC and its doctors. That can be a problem because you can't go anywhere in this town without bumping your head on a UPMC sign.
UPMC says people who sign up for Community Blue don't realize it's a non-UPMC plan. In fact, UPMC argues that Highmark created the plan to steer patients away from UPMC — by pricing it well below national averages.
You read that right: Community Blue is cheap. Dirt cheap. For example, a single, 35-year-old person making about $30,000 a year could pay $139 a month for the cheapest Community Blue plan, compared with roughly $230 a month for the cheapest UPMC Health Plan. That's a savings of $91.
Pittsburgh needs a competitive health care marketplace, ideally one in which UPMC would lower prices to compete with those attractive and not-so-badly-priced Community Blue plans.
Some might argue that even in health care, you get what you pay for. But should we pay more for UPMC care? As it stands, it will be up to individuals to decide if the lower-priced health care Highmark offers at its newly formed Allegheny Health Network meets their standards.
If Highmark is strong, as Winkenwerder says, it's because it finally can offer a product that lowers the cost for consumers.
The only thing Highmark needs to worry about is being open and truthful with customers.
Luis Fábregas is Trib Total Media's medical editor. Reach him at 412-320-7998 or firstname.lastname@example.org.
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