Highmark is a health insurer that dominates western Pennsylvania. The company insures approximately 43 percent of the residents of Allegheny County, where Pittsburgh is located and Highmark has its headquarters, and the figures for all of southwestern Pennsylvania are similar. Overall, its various health insurance plans in Pennsylvania, West Virginia, and Delaware cover more than five million people. Highmark also owns Davis Vision, which provides vision (eyeglasses and contacts) insurance to 19 million people (including, sadly, The Curmudgeon, who didn’t know that someone could make eyeglasses wrong until an encounter with Davis a few years ago in which it got his glasses wrong not once but twice).
To extend its reach and advance its efforts to corner the market in its own little part of the world, Highmark buys hospitals, including what is now known as the Allegheny Health Network, which consists of five hospitals, and others as well.
Last September Highmark shared information about its financial performance for the first six months of 2015. And some performance it was, too (in the company’s own words):
Today, Highmark Health announced financial results for the first six months of 2015, citing an excess of revenue over expenses of $221 million, an improvement of $226 million from the same period in 2014.
“Excess of revenue,” you may know, is how organizations that the IRS considers “non-profit” describe their profits. The Curmudgeon puts it this way because a lot of non-profits like Highmark – which is a Blue Cross insurer – own for-profit subsidiaries. This is a scam that enables non-profit companies to make lots of money. They don’t pay income taxes, though, on the profits of their non-profits, which means those organizations don’t carry their share of society’s burdens – you know, for things like police and fire services, public schools, national defense, and much more – leaving the rest of us suckers to pick up the slack for them.
Pick up the slack for an organization that had “an excess of revenue over expenses of $221 million” – profits, that is – over a six-month period in 2015.
Highmark’s financial reports note that not all of its businesses are equally profitable, or profitable at all, and recently came news that it’s going to do something about that: it’s cutting payments to doctors who serve some of its members by four percent.
While The Curmudgeon is not going to lose sleep over doctors making less money, this is yet another example of an incredibly successful, incredibly rich, and incredibly lucrative business, already buoyed by unjustifiable tax breaks thanks to a non-profit status that lawmakers are too gutless to challenge, achieving and maintaining its success at the expense of the people who work for it – but in this case, only some of those people. In this particular case, the company is reducing the pay only of doctors who contract with a few of its health plans that are on Obamacare exchanges and are not making money.
The announcement didn’t say anything about the people who decided to go after that new market getting their pay cut (or even being fired).
It didn’t say anything about the people who created the insurance plans for that purpose getting their pay cut (or even being fired).
And it didn’t say anything about the people who did such a poor job developing the rates for those plans and projecting future customer utilization getting their pay cut (or even getting fired).
No, all of those people, the corporate employees whom the corporate executives care most about, are safe, so the doctors alone – the people who do the real work in helping the company to its vast profits – bear the brunt of the burden of the failure of others. And about those profits: The Curmudgeon has written about them before and they are enormous; see that description here.
What’s worse, if Highmark is cutting the pay of the doctors who provide the care that the company exists to provide, you can only imagine how it must be coming down on the backs of the ordinary working people who enter the data, process the claims, staff the phone banks, and sweep up the floors at night.
While the people who made the decisions that led to this non-calamitous calamity just skate.