FEW HEALTH-related companies have been as important to Maryland as CareFirst BlueCross BlueShield, which provides health insurance and quality health care for more than 2 million Marylanders.
So it should come as no surprise that controversy has accompanied CareFirst's proposal to convert to a for-profit company and merge with WellPoint Health Networks.
As an executive with more than 20 years in the health insurance industry, I understand how emotional debates over health care can get and how justifiably proud and protective Marylanders are of their health care system. I also know that CareFirst has been a friend of Maryland for nearly 65 years. As such, the question for all of us should be, "In what form will CareFirst best be able to continue serving Maryland's citizens in the state's increasingly competitive health care market?"
Politics being politics, we've already heard a hue and cry in Annapolis from some legislators and critics who hear the words "merger" and "profits" and immediately assume the worst. There's even legislation that's been introduced in Annapolis that would have CareFirst turn back the clock to an earlier era. Certainly something as critical as CareFirst's proposal deserves more considered thought.
The reality is that the health care marketplace is changing rapidly, and like any other business, CareFirst must have the ability and resources to remain financially strong and competitive. Already, CareFirst's Maryland affiliate competes with larger, nationally based insurers, including Aetna and Kaiser Permanente.
The proposed merger would generate significant customer value while keeping management of the company in Maryland. CareFirst says the transaction would result in a broader array of health insurance products and improved corporate and online technologies that would enable CareFirst to process claims faster, reimburse medical care providers more quickly and answer member calls more quickly and accurately.
Most notably, the merger would establish a charitable trust in Maryland, Washington and Delaware. This trust could provide opportunities for elected state officials to use Maryland's share of the $1.3 billion that WellPoint would pay to acquire CareFirst to improve access to health care and prescription drugs, finance health care research and deal with other unmet health needs of Maryland's citizens.
Given the overstated claims and heated rhetoric of critics of this transaction, one may be concerned that there are no safeguards in place to protect the public's interest. But Marylanders should know that there is a formal process specifically created to review the merits of just such proposals to ensure that the change would be in the public interest.
As a part of that process, Maryland's insurance commissioner has scheduled a series of community forums throughout the state, to be followed by extensive formal public hearings, to study the proposal. These hearings are just part of a rigorous review-and-approval process that includes input from lawmakers, medical professionals, business interests, economic analysts and concerned citizens.
More than 3.1 million members in the mid-Atlantic region rely on CareFirst BlueCross BlueShield for their health care coverage. The company, based in Owings Mills, employs more than 6,500 people, including more than 3,800 in Maryland. Given the stakes for CareFirst and its members, the worst thing we could do is rush to judgment and let emotional rhetoric and election-year politics overwhelm the process.
We need to let this system work.
William Simmons is president of Group Benefits Services Inc., a third-party administrator that markets, sells and administers employee benefit plans through more than 500 insurance brokers/consultants.