Blue Cross responds to Steward’s attacks

BLUE CROSS & BLUE SHIELD of Rhode Island President and CEO Peter Andruszkiewicz visited Providence Business News on July 31 to respond and present the health insurer’s point of view to Steward Health Care's marketing campaign.
Posted 8/1/12

PROVIDENCE – After enduring two weeks of attacks in what he termed a “distasteful,” “fear-mongering” and “mud-slinging” media campaign from Boston-based for-profit hospital network Steward Health Care, Blue Cross & Blue Shield of Rhode Island President and CEO Peter Andruszkiewicz visited Providence Business News on July 31 to respond and present the health insurer’s point of view.

Steward, in partnership with Landmark Medical Center, the hospital in receivership Steward is seeking to acquire, and United Nurses & Allied Professionals, the union representing workers at Landmark, have sought to pin the blame on the state’s largest health insurer for Landmark’s financial woes.

Together, they bought a series of full-page color advertisements running daily in The Providence Journal and The Woonsocket Call and weekly in the Providence Business News.

The ads, with provocative language claiming: “Blue Cross put Landmark on life support. Now they’re pulling the plug,” were designed and placed by the Boathouse Group in Waltham, Mass., the communications agency that handles Steward’s account. A parallel ad campaign is also running on radio.

“We are not releasing specific cost information,” Christopher Murphy, Steward spokesman, told the Providence Business News. Based on the frequency and the size of the ad buy, and the published rates for advertising, the price tag for such a media campaign is estimated to cost tens of thousands of dollars.

During his visit, Andruszkiewicz countered point-by-point the claims in the ads. On average, the daily patient census at Landmark’s 214-bed hospital is 100, and of that, on average, 10 are Blue Cross members, according to Andruszkiewicz.

“It’s really hard to imagine how our reimbursement on those 10 patients a day is determinant of whether or not this hospital lives or dies,” said Andruszkiewicz.

In terms of its members’ use of Landmark facilities, Andruszkiewicz continued, 80 percent of the Blue Cross commercial insurance members and 65 percent of the Blue Cross Medicare members who live in the catchment area served by Landmark do not use Landmark. “People get in their car, and drive by Landmark, and go someplace else,” he said. When asked where patients went instead, he answered: “Providence, Boston, Miriam [Hospital] and Memorial [Hospital]. They don’t go to Landmark.”

To the claim that Blue Cross was starving Landmark through low reimbursements, Andruszkiewicz said the exact opposite was true. Over the last 10-year period, he said, Blue Cross had increased its reimbursement rates by 109 percent, or roughly 7 percent a year on a compound basis.

Regarding the hospital’s financial troubles, Andruszkiewicz said that Blue Cross, at the request of Landmark, made advance cash payments in lieu of reimbursement rates increases of $8 million over the last 10 years.

The insurer also made a loan of $2 million to Landmark when it was on the verge of bankruptcy in 2006 and 2007. “Never has a penny of that been repaid,” Andruszkiewicz said.

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