BUSINESSEmpire conversion bucks the foundation trendMost of the money generated from New York Blues plan's transition to a for-profit company is scheduled to go to raises for state health employees.By Julie A. Jacob, amednews staff. Feb. 11, 2002. Consumer groups in New York are protesting the state's plan for spending the estimated $1.1 billion that will be generated from Empire Blue Cross Blue Shield's conversion to a for-profit company. Consumers Union and other consumer advocacy organizations are upset that most of the money from Empire's conversion will fund pay raises for unionized hospital, nursing home and health clinic employees, instead of being used for health care programs for uninsured people. "The standard really has been, for Blue Cross conversions, to preserve this money for a foundation ... that will provide benefits to the public on an ongoing basis," said Phil Gonzalez, policy analyst for Boston-based Community Catalyst, a consumers health care advocacy group. A spokeswoman for the Medical Society of the State of New York said the society "wants to see the money used for health care initiatives." Consumers Union has sent letters to the New York Attorney General's Office and New York Dept. of Insurance, urging regulators to halt the conversion unless all of the money generated from Empire's initial stock offering is put into a charitable foundation that would fund health care programs for uninsured people. State legislators last month passed a bill that would allocate 95% of the money from the upcoming conversion for pay increases for health care workers and just 5% for a charitable health care foundation. The legislation is part of a broader health care bill that also includes funding for a physicians' liability program, a prescription drug financial assistance program and expanded Medicaid benefits.
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Copyright 2002 American Medical Association. All rights reserved.
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