I love working for Blue Cross and Blue Shield of Louisiana. And I am 100% sold on the notion that the best way to pay for a person’s healthcare is by creating entities just like us and giving them the freedom to make local decisions and manage our healthcare funds.
As a 35-year cancer survivor, married to a registered nurse, who has lived all of his 59 years right here in Louisiana, I think about healthcare costs and spending all the time (and not just because I’m a healthcare economist). It even keeps me up at night, but in a good way. I ruminate constantly on the best way to help people stay in good health. And, at the same time, how to pay for it all.
When I stand in my driveway and visit with my neighbors, one thought keeps popping into my head: My friends and family, at some point in their lives, will need a LOT more healthcare than they can afford. What’s a 10-day hospital stay cost nowadays? How about a drug course to correct cancer, or Hepatitis C or even arthritis? What about a hospitalization driven by COVID-19? Do you have $100,000 (or more) set aside in an account, just waiting for you to get sick? Very few people do. For almost all of us, if someone else doesn’t have money ready to take care of us when we get sick, we’re in big trouble. Why?
Staggeringly Big Healthcare System
Our healthcare system in the U.S. consumes world-changing amounts of money. In their latest estimate, the United Nations Organization for Economic Co-operation and Development (OECD) said that the United States, with a total economic output of roughly $20 trillion, managed to spend 17% of it (that’s about $3.4 trillion) on healthcare alone in 2019. So, for every $1 the U.S. produces in value, 17 cents of it goes to healthcare. That’s a lot. We only spend about six cents of that dollar on education, by the way.
So healthcare is obviously something we, as Americans, place a VERY high value upon. We’ve built a healthcare system so expensive that we are entirely dependent on other entities – let’s call them “third-party payers” – so we can have access to healthcare when we really need it. And the question becomes, whom do you trust to aggregate that money on your behalf? Which is the best third-party payer for you?
Blue Cross and Blue Shield of Louisiana is my favorite one. It’s all about structure and motivation.
Blue Cross is a Local Company, Without Shareholders
Blue Cross is a not-for-profit but tax-paying company. This means there are no “invisible” stock owners or bond owners from far away, skimming a few percentage points of profit from the fund or driving management to make decisions that are better for investors than for members. No Wall Street types are involved in our decision cycles. As a member, you own the company.*
If our Board of Directors, which is composed entirely of Louisiana residents and Blue Cross members who come from many different walks of life, wants to make a decision, they don’t have to consult with anyone from New York or D.C. They can make a Louisiana decision, for Louisiana people, for Louisiana reasons. Everybody in the process lives, works and invests here.
Imagine if you lived your whole day SURROUNDED by your customers? We do, because one out of every three people in Louisiana has a Blue Cross card in his/her pocket. How would that affect YOUR decision making, knowing that every step you make affects the lives of one out of every three people you meet in a given day?
Wherever I go, whether to church, or grocery store, or the doctor’s office, I’m surrounded by people who depend on Blue Cross to be there when they get sick. One out of three. Imagine how that affects my decision making.
Believe me, it’s on all of our minds every single day, and we act accordingly. I love knowing that we have the mission to improve the health and lives of our friends and neighbors. I am proud that so many people, government agencies and companies trust us to do this for them. I enjoy the fact that we are led by Louisianans every step of the way. And, I couldn’t be prouder of our response in the face of the current pandemic.
D.C. Power Center
That is why the continued healthcare reform, handed down from Washington, D.C. over the past decade and still going, worries me. It is degrading our ability to make local decisions for you.
By passing the Affordable Care Act in 2010, Congress was saying that local decision makers had too much power. By passing it, they took power away from your friends and neighbors in Louisiana and parked that authority in Washington, D.C. The small group and individual health insurance markets are now D.C. fiefdoms. Washington designs the insurance, they decide how much risk you are allowed to take, they decide what you can keep and what you have to give up.
Over the past nearly 11 years and across three presidential administrations, their federal-level changes have caused local challenges. Lax enforcement of special enrollment and pricing policies, combined with an aging risk pool, have driven up costs faster than anything we could have imagined. The zeroing out of the individual mandate removed a key hook to get younger, healthier people to sign up for health insurance. The Feds have tied local hands in ways that are onerous and expensive. And they are asking YOU to foot the bill.
We are working hard to counteract their bad execution and decision making. We are fighting to do what is best for our Louisiana residents. It’s a battle that is worth fighting. And as we move into the Biden Administration, we will continue keeping an eye on D.C. changes that could affect Louisiana families.
(I bet this would keep you up at night too!)
Despite these challenges, I believe that the best outcome Louisiana can have is a local company, acting on behalf of local residents, fighting for our friends and neighbors and making sure that when they get sick, the money is there to get them well without creating a horrible out-of-pocket financial burden. Our friends, neighbors and family in Louisiana deserve nothing less. And not-for-profit Blue Cross and Blue Shield of Louisiana, run by locals making local decisions, is the best way to make sure Louisiana’s healthcare needs are met.
That knowledge is why I love working for Blue Cross and Blue Shield of Louisiana.
* Anyone who holds a contract with Blue Cross is an owner. This includes companies that pay premiums on behalf of their employees, but not their employees, and individual members who hold policies (for family coverage, this would be the person whose name is on the contract).