WellPoint CEO Calls for Quality in Health Reform

INDIANAPOLIS_A health care reform push that aims at the insurance industry misses a much bigger target in its quest to lower rising costs, WellPoint CEO Angela Braly said in a speech Tuesday.

Three cents of every health insurance premium dollar collected go toward insurer profits, while 87 cents go toward medical care, Braly told her Economic Club of Indiana audience.

"If you completely eliminated insurance industry profits, which is clearly the aim for some, you will pay for two days of health care in America," she said, adding later that health care problems won't be solved "by focusing only on the insurance side of the equation."

Congress is in the middle of debates over ways to overhaul health care in the United States to trim costs and cover the nation's uninsured population of an estimated 46 million people.

WellPoint, which operates Blue Cross Blue Shield plans in 14 states, is the largest private insurer based on membership.

Braly emphasized quality of care over quantity as a key to taming costs during her 26-minute speech. She noted that Medicare spending totaled $468 billion last year, and the program is projected to be bankrupt in eight years.

"Traditional Medicare pays for quantity rather than quality, and all of the pilot programs that were intended to help government change that ... have failed," she said.

She cited a study published several years ago in the New England Journal of Medicine that said patients receive recommended care, or evidence-based medicine, only about half the time. Braly also said about $750 billion is spent every year on health care "that doesn't improve the health of a single person."

This inefficiency, she said, drives up costs and forms the "crux of the problem."

Braly also noted that her industry backs reform and favors coverage for all, as long as people are required to have insurance.

"That way everyone is in the pool, everyone shares the risk, and everyone can get into a system that helps them get higher quality and more affordable care that's there when they need it," she said.

The WellPoint CEO also said this system should not include a government-backed option, something Democrats and President Obama have said they favor as a way to keep insurance companies honest. Braly said such a plan and its ensuing low reimbursement would shift costs to private insurers and whittle away their membership.

She said families covered by private insurance already pay about $2,500 per year in cost shifting to make up for uninsured care and lower reimbursement rates provided by Medicare and Medicaid.

About a dozen protesters walked the sidewalks outside the downtown Indianapolis location for Braly's speech.

Retired nurse Catherine Nagy, 68, carried a yellow-and-black board that told passing drivers, "Insurance profits are bad for my health." The Indianapolis resident said she worked as a nurse for 35 years, and care affordability was never an issue when she started.

But Nagy, who worked with cancer patients, spent a good portion of her job before retirement appealing coverage denials by insurance companies. Nagy said she's tired of seeing collection jars at gas stations or bake sales being held to raise money for medical expenses.

"Families should not have to do this," she said. "They should not have to count pennies to provide funds to care for children with leukemia."

She said she doesn't believe profits are "evil," but more people would be covered if insurers were doing a good job.

"I just don't understand why we have 46 million people uninsured," she said. "We're the wealthiest country in the world."