Monday, June 30, 2008

Changing Blues to For-Profit: Little Effect 

By John LaPlante

Categories:  Insurance Regulation, New Jersey

Horizon Blue Cross Blue Shield is the largest health insurance company in New Jersey--and the largest non-profit one.

It's seeking a conversion to a for-profit status, which worries some self-styled consumer advocates.

The Newark Star-Ledger, however, says that the concern may be over nothing. After asking whether such conversions have the dire results predicted by some opponents, it says " The answer from several academics who have studied a handful of the 14 states where nonprofit Blue Cross organizations have become for-profit public companies: Not really."

So why the opposition to the change? A tiny segment of the American population is outright socialistic, opposing anything that has the word "profit" attached to it. A somewhat larger segment believes that the profit motive somehow makes for worse health care outcomes, in part because it results in higher prices.

But of course few people actually face real prices (and the choices the present) in the strange world of health care financing.

Further, just because an organization has a non-profit status doesn't mean that its employees and executives live on Mother Teresa-like salaries, passing along the savings to patients.

I'm not entirely sure what to make of all this, but we would in all likelihood be better off were everything about health care, including the insurance market, incorporate more of a free and open market.



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