Blue Cross and Blue Shield of North Carolina Introduces Benefits Package Featuring Obesity Treatments
Blue Cross and Blue Shield of North Carolina on Tuesday announced that it will provide benefits to prevent and treat weight problems to about 1.1 million members, the Washington Post reports. Under the new benefit, called Healthy Lifestyle Choices, the company will cover as many as four doctor visits annually and tests to assess weight problems, as well as Meridia and Xenical -- two FDA-approved weight-loss drugs not typically covered by health insurers -- and consultations with licensed dieticians. In addition, the program will identify 12 doctors at seven practices statewide who have "demonstrated excellence" in performing bariatric surgery, which the insurer will continue to cover, the Post reports. The company will determine which members are eligible for coverage. Employers also will have to decide whether to make it available to workers (Stein, Washington Post, 10/13). BCBSNC officials said that about 55% of its members are overweight or obese and that such members accounted for about $83.1 million in excess costs last year.
Costs
The new benefit "comes as the cost of treating obesity-related health problems, such as high blood pressure, heart disease and diabetes, is rising sharply," the Wall Street Journal reports. BCBSNC officials said that claims for obese members were 32% higher than claims for patients whose weights were normal and that claims for overweight patients were 18% higher (McKay, Wall Street Journal, 10/13). Company officials said the cost of the program has not been calculated but added that they expect future savings to offset program costs.
Reaction
Anti-obesity advocacy groups said the new benefits are "a groundbreaking step that will enable patients and doctors to take a more active role in preventing people from becoming overweight in the first place and treating them if they do," the Post reports. Health care experts say the new benefit likely will serve as a model for other insurers looking to reduce health costs (Washington Post, 10/13). However, for the program to succeed, the insurer "will have to convince enough of its members to take advantage of diet counseling and other weight-management programs" to "avoid paying for too many costlier procedures," the Journal reports (Wall Street Journal, 10/13). BCBSNC CEO and President Robert Greczyn said, "This is the public health crisis of the 21st century. Public health experts believe that, without a dramatic change, the coming generation will die at a younger age than our generation. We are going to do more about obesity. We want to walk the walk." Diane Robertson, of independent health technology assessment company ECRI, said she thinks as health costs continue to rise, "we're going to be seeing a lot more of this" (Washington Post, 10/13).
Criticism
The health plan's recent spending practices are "raising questions" among some members and industry analysts, who say the not-for-profit insurer should lower premiums before providing no-cost generic drugs or expanding its advertising efforts, the Raleigh News & Observer reports. BCBS, North Carolina's largest insurer with about 3.1 million members, in 2003 drew criticism after reporting a record $196.3 million in net income. In recent months, the company has launched a number of new programs that officials say are designed to help BCBS "do right by its members and employees while maintaining its lead position in the marketplace." Efforts include plans to spend about $10 million to give no-cost generic drugs to members who use generic medications in the last three months of this year, as well a plan to provide no-cost flu shots to members. The company also is spending money to renovate its headquarters, bringing jobs that had been sent to out-of-state vendors back to the company and run a series of new television ads. Critics say the new initiatives "look like Blue Cross throwing out bones to appease consumers who are hungry for a premium rebate" and "burning cash" in order to avoid criticism for its high profits, the News & Observer reports. Health benefits consultant David Garbrick said, "I can look at it one way and congratulate them on doing the right thing for their (members) or I can look at them and say, those are all quick ways to reduce profits." Adam Searing, project director of the N.C. Health Access Coalition, said, "They have a lot of money and they're doing good things with it, and it's hard to argue with that. But should they really be doing all this stuff before they reduce premiums?"
BCBS Response
BCBS chief financial officer Dan Glaser defended the company's spending policies, saying, "If we take 100 small steps like this, we will impact medical costs, and that will mean lower premiums in the long run." He noted that BCBS already is seeking lower premium increases this year for its most popular individual and group plans. Glaser said that he expects 2004 earnings to be down 10% to 15% from last year, due largely to the rising costs of prescription drugs, physician care and hospitalizations. The News & Observer reports that BCBS' net income has remained "strong" so far this year but is falling relative to last year. Through the first half of 2004, the company made $104.1 million, down 13% from 2003. Health benefits consultants say BCBS often offers better premium rates and coverage than its competitors in North Carolina (Fisher, Raleigh News & Observer, 10/12).
