In a Conversation With Larry C. Glasscock, the CEO of Wellpoint, John  Igleheart has either been massively restricted by Glasscock’s PR handlers or has revealed himself to be a complete pussy.

A little history: having been a senior exec at CareFirst (Blues of DC), Glasscock took over the fast growing regional Blues plans based around Anthem BCBS in Indiana, took them for-profit and made himself a fortune. A great American success story.

He then merged Anthem with the big other for-profit Blues agglomeration, Wellpoint which was run by Len Schaeffer, in 2005. I’ve had a fair bit to say about the variance between Len Schaeffer’s high-fallooting rhetoric and the actual on the ground performance of his company. Glasscock appears no better. And in many ways, he’s been much worse.

I’m not saying that Igleheart should necessarily have gone after him for the fact alone that he made $25m last year (not to mention the millions more in stock)—after all Wellpoint stock has done very well. But given that certain other health plan CEOs are in some hot water for their outright greed and fraudulent behavior, it might just have come up.

But the reason that the stock has done so well is because Wellpoint
(and other insurers) have stuck it to their clients. They’ve got away
with that because of the appalling display of incompetence by employers
(their clients) over the last decade. How appalling? Glasscock thinks
that employers will get more involved in the future i.e. they have just
sat back and taken it so far. Here’s Glasscock’s explanation as to why
they’ve taken so long:

Iglehart:
Why has it taken so long for the employer community to do so when
rising health expenditures have been a serious concern of companies for
many years?

Glasscock:
It has been difficult oftentimes for employers to directly address the
cost issues that have resulted from increased pressure on managed care
contracts. The reasons for this are varied. Hospital reimbursement is
complex. Payment methodologies are difficult to understand for those
not familiar with them. Risk-adjusted comparative cost data on
hospitals are not readily accessible, and many plans aren’t able to
make these comparisons. The ones that do face challenges communicating
such information to employers. During managed care contract rate
negotiations, hospitals sometimes challenge such cost comparison data.
And hospitals, which often count respected local business leaders on
their boards of directors, have a lot of credibility with regard to the
challenges they raise. So employers feel caught in the middle between
their local hospital and their managed care company.

Transparency is another major barrier for
employers. Hospitals and physicians are often understandably
uncomfortable allowing specific information to be shared. For
transparency to work, all stakeholders–hospitals, physicians,
employers, and insurers–must find ways to collaborate and work
together to create a system that benefits all parties.

So in other words, “we the health plan—who get paid to do this— have
completely failed to be the agent of the employer, taxpayer or
individual in controlling health care costs. And we’ve been laughing at
them all the way to the bank as our share of total health dollars has
rapidly increased (e.g Medical loss ratios have gone down).” But we
don’t hear anything from Igleheart about that!

And then Igleheart lets Glasscock, whose major recent achievement
has been to expand nationwide a bunch of cream-skimming products with
stupid names which Schaeffer introduced, pontificate on about the great
tools he’s bringing consumers. But Igleheart even lets him get away
with a blatantly wrong answer about why insurance rates in Mass, NY et
al are so high.

John, while the Massachusetts plan represents a
step forward in trying to find solutions for the uninsured, I have
several concerns about its individual mandate. Under the new law,
individuals are only required to obtain coverage if it is "affordable"
for them. But the Massachusetts law, as I understand it, preserved all
of the commonwealth’s existing benefit mandates, so it is difficult to
see how health insurance coverage under the new program will be any
more affordable once the mandate to purchase coverage becomes effective
than it is today.

Hint—it’s not mandated benefits that makes insurance unaffordable,
it’s mandated community rating and lack of underwriting. If there’s
underwriting as happens in every other state, then Wellpoint (and
everyone else) makes way more money because they don’t have to sell
insurance to sick people. And of course those people can’t get
insurance.

And if by some accident they do sell insurance to people who
actually need it—funnily enough, they have a solution for that.
Wellpoint’s biggest single unit, Blue Cross of California, has been
caught red-handed systematically retroactively cancelling insurance
policies. This news even got into the local newspaper in Glasscock’s home town.

Facing the threat of punishment from regulators, Blue Cross of
California, a subsidiary of Indianapolis-based WellPoint, has quietly
agreed to settle more than 70 lawsuits and claims from patients who
accused the state’s largest health insurer of illegally canceling their
coverage after they got sick. The settlements include undisclosed
monetary awards and will allow former policyholders to pay off hefty
medical bills they were stuck with after losing their insurance. In
exchange, the former policyholders agreed to drop allegations that Blue
Cross was canceling individual policies to avoid paying medical bills.The
settlements follow a series of newspaper stories examining the
controversial cancellations and resultant hardships on patients, their
families, hospitals and physicians. Among those reaching settlements is
a Riverside, Calif., family that was forced to sell its home after
being hit with a mountain of medical bills. Another settlement involves
the family of a 6-year-old girl who was dropped by the insurer after
she was diagnosed with a life-threatening tumor in her jaw. WellPoint
confirmed it was in mediation regarding the suits but declined further
comment. William Shernoff, a lawyer representing many plaintiffs, said
his clients won’t have to worry about medical bills ever again.

Is it even slightly possible that Igleheart might have raised the
question of what the hell Glasscock’s company was up to? Glasscock gets
$25m big ones last year, while his company ditches on its obligations
and his clients lose their house. Any hint of an opening there for a
question John?

Perhaps Igleheart should be wondering whether someone with those
kind of ethics should be running a health plan, let alone being given a
forum in the nation’s leading health policy journal to pontificate on
the advice he should give the President. Or did Glasscock just not know
that this was happening on his watch?

Meanwhile Anthem/Wellpoint is being sued for anti-trust by a local broker
which it’s trying to prevent from destroying the risk pool it controls
in its monopoly states with some cream-skimming tactics that exceed
those even Schaeffer dreamt up. I think that’s pretty funny in a tragic
sort of way…