It’s all in their pre-nup: Highmark Inc. and Independence Blue Cross want to marry, but if either decides to dump the other in favor of an outside suitor, or for certain other reasons, it’ll cost $15 million. And by the way, this breakup fee can’t be socked away in some remote investment. In their consolidation agreement filed with Pennsylvania’s Department of Insurance, the two Blues say it must be paid with “immediately available funds.” — Jane M. Von Bergen
Infinity Property & Casualty Corp. said gross auto insurance premiums from its targeted markets, which include Philadelphia, rose 27 percent in three months that ended March 31 compared with the same period a year earlier, according to a filing with the Securities & Exchange Commission. The Birmingham, Ala.-based insurer reported results yesterday. -- Jonathan Berr
Cigna Corp. (NYSE: CI) Chief Financial Officer Michael Bell notified the SEC yesterday that he exercised options on 31,217 shares last Friday at prices ranging from $75.44 to $96.53 and resold them that day for $165.78 to $166.14. That comes to at least $2.16 million. Cigna shares are up more than 24 percent this year, helped by better-than-expected first quarter results. The company also raised its forecast for the year. Also see AP story. -- Jonathan Berr
IMontgomery County Commission chairman Thomas J. Ellis' new parttime gig as a board member of Independence Blue Cross has raised the hackles of his commission colleague, Ruth Damsker, the lone Democrat on the three-person board.
According to the Evening Bulletin, she's unhappy that the matter came up suddenly and she's worried about how it will look to have an outgoing commissioner land a paying position with the Blues. (Ellis didn't get the GOP nod to keep his seat on the county commission.)
Ellis, a lawyer with Ballard Spahr Andrews & Ingersoll, said he won't take the $12,000 Blue Cross stipend while he's still a county commissioner. It's not clear how long Ellis will have the new job anyway. As it is, the Blue's board is pretty heavy, with some 30 members. If Independence Blue Cross' proposed merger with Pittsburgh's Highmark Inc. goes through, the combined board will need to be trimmed down and some will have to go. Whether Ellis will make it to the new uber-board remains to be seen.
Once again, the Henry F. Kaiser Family Foundation's annual health insurance survey, released yesterday, showed that health insurers' efforts to sell high-deductible health plans haven't met with much success, particularly in larger firms.
That's because, Kaiser researchers said, employees, when given a choice, aren't tremendously excited about having to pay high deductibles, especially if they are low-income and even more especially if their companies don't help them fund the deductibles through a savings or reimbursement program.
That's Kaiser's take, but Ivy Silver, a benefits consultant and president of Commonwealth Consulting Inc., in Jenkintown, has seen a different trend. Yes, companies are looking at these high deductible plans, but they are adopting them with a little twist, she said.
Instead of across-the-board high deductibles, companies, Silver said, are carving out certain benefits, such as surgery, and making just that portion high deductible. Then the companies are self-insuring for that particular deductible. True, they have to employ a half dozen h.r. specialists to sit with their fingers crossed, hoping that nobody has to pay a visit to the OR. But, Silver said, they get a break on the cost of their premiums.
So why do insurance companies keep pitching these products? Kaiser officials had an answer for that too. They pitch them because they are the only real innovation -- other than disease management -- that the insurance companies have to offer.
You have to read all the way to the end of a light-hearted story in the Wall Street Journal on Saturday to catch this: insurance brokerage firm Philadelphia Consolidated Holding Corp. (NASDAQ: PHLY), run by James J. Maguire Jr., is in negotiations to sell a unique kind of cancellation-insurance coverage to the organizers of the New York City Marathon next year. (This year's race took place yesterday, covered by somebody else for the first time). The WSJ portrays this kind of insurance as a new trend -- marathon organizers everywhere considering extra coverage because of a recent spate of race cancellations, which some people actually link to global warming. Anyway, not clear if this is actually a trend, or if global warming is the culprit. But WSJ writers Aaron Lucchetti and Liam Pleven do unearth this anecdote about NYC organizer Mary Wittenberg and Maguire:
At a pre-race dinner this week of blackened grouper and flourless brownies, she mentioned the new policy to James J. Maguire Jr., a marathon runner who also happens to be chief executive of an insurance company, Philadelphia Consolidated Holding Corp. "We could have saved you some money," Mr. Maguire said. ... Ms. Wittenberg -- like the competitive marathoner she used to be (a bum knee sidelines her these days) -- says she plans to follow up with Mr. Maguire about his offer after the race. "The negotiations are on!"
By the way, unclear if Maguire actually ran yesterday. His name does not appear to be one of the many Maguires listed among the finishers.
Appearances deceived us. In our previous post about James J. Maguire Jr., CEO of Philadelphia Insurance Companies (NASDAQ: PHLY), we said he did not appear to be among the finishers of the NYC marathon. Turns out he did run, listed as Jamie Maguire, not James. He finished at No. 2284. But he was first among a half-dozen or so Maguires at a mile pace of 7:33.
James J. Maguire Sr., chairman and founder of Philadelphia Insurance Cos. in Wayne, has made a relatively big purchase of his own company's shares. He said in an SEC filing yesterday that he bought 114,500 shares worth $4.2 million worth this week. Maguire is at least 73 and this could be for his children. The filing says the purchases were "made from family trusts, of which certain of his children are beneficiaries." PHLY stock rose about 1 percent to $38.26 since his purchase at $37.
Today's lesson: The squeaky wheel gets the liver transplant.
Cigna Corp. is on the hot-seat in California today where nurses from the California Nurses Association union planned to march on the Philadelphia health insurer's California offices.
They wanted Cigna to rescind its decision denying a liver transplant to Nataline Sarkisyan, a 17-year-old patient at the UCLA Medical Center. The nurses association said Cigna told the family that the treatment was too experimental.
At first, in published reports in the Los Angeles Daily News and Hartford Courant, Cigna would not comment on the case, citing patient privacy, but urged patients in general to make use of Cigna's appeal process when they disagree with a decision.
But, that wasn't the end of the story.
Here's Cigna's latest comment:
"Our hearts go out to Nataline and her family, as they endure this terrible ordeal. Based on the unique circumstances of this situation, and although it is outside the scope of the plan's coverage and despite the lack of medical evidence regarding the effectiveness of such treatment, CIGNA HealthCare has decided to make an exception in this rare and unusual case and we will provide coverage should she proceed with the requested liver transplant.Our thoughts and prayers are with Nataline and her family at this difficult time."
This isn't Cigna's first brush with the limelight. In Michael Moore's healthcare documentary "Sicko," Cigna gets slammed for denying cochlear implants to a child. In the end, Cigna relents. By the way, the front page of Moore's website asked people to call Cigna. The headline? "Chopped Liver."
Nataline Sarkisyan |
The nurses association, which led protests against Cigna on Sarkisyan's behalf, has put out a statement blasting the insurance company and accusing it of perpetrating "a horrific tragedy that demonstrates what is so fundamentally wrong with our health care system today."
Note that this girl, according to the AP, was in a vegetative state. She had leukemia. Her doctors recommended a new liver only after the bone marrow transplant procedure that they performed had failed. Our question: If it was a such a viable life-saving measure, why didn't the hospital just do it and eat the cost itself, under an uncompensated care financing system that every state has? There are way too many questions about this case to draw conclusions.
We've put in a call to Cigna, which had not commented on the situation since the teen-ager died after it said Thursday that it would cover the procedure.
Cigna Corp. has put out a statement regarding Nataline Sarkisyan, who died Thursday evening just a few hours after the insurer relented and agreed to cover her liver transplant. Cigna now faces a threat of lawsuits by the family, and we can only imagine the lawyering that went on Friday over at 16th and Chestnut before this statement emerged, signed by Wendell Potter, one of their spokesmen.
"Our deepest sympathies are with Nataline's family. Their loss is immeasurable, and our thoughts and prayers are with them. We deeply hope that the outpouring of concern, care and love that are being expressed for Nataline's family help them at this time."
One though as Cigna moves into crisis-communications mode: Perhaps it needs to get out in front of this story, instead of being on the defensive. This innocuous but kind-enough statement, for example, might have been signed by the CEO, Ed Hanway. Sometimes little things matter.
News of Nataline's death is getting picked up worldwide (see the Daily Telegraph and California local TV). The blogosphere is also lighting up. Allspinzone says Cigna's accountant has not now put a dollar value on a girl's life. Presidential candidate John Edwards' blog is making hay for his campaign.
Stay tuned.
Cigna Corp. just sent us this statement, which it describes as an internal memo to all Cigna HealthCare employees from Jeffrey Kang, the chief medical officer, and David Cordani, the division president. In essence, it's a reiteration of Cigna's defense of its behavior in the Sarkisyan affair, and also asserts that Cigna cannot really defend its actions because it has to watch its mouth in the face of "threatened litigation" and because of patient confidentiality rules.
Still, Cigna does manage to point out, in artful language, that it had two independent experts (who it didn't identify) who said the recommended transplant "would not have been an effective or appropriate treatement." The implication seems to be Cigna came to conclude not just that the treatment was experimental, but that it would not save the girl's life. And yet it agreed to pay for her transplant anyway, and to switch her from the 10 percent of transplant claims it says rejects to the 90 percent it says it grants. (We'll have to take these numbers are face value.)
Anyway, here's the memo (download) and in full:
Inquirer staff writer Stacey Burling's story Sunday on the ethics of and current practice in how medical experts and insurance professionals hash out when someone tells a patient "no" to treatment or payment has produced a variety of reader reaction.
The case involves a 17-year-old named Nataline Sarkisyan, who died while awaiting a liver transplant that insurer Cigna Corp. initially declined to pay for. Shortly after Cigna officials changed their minds, she died.
I'll post comments once I get OKs from those readers.
The CEO of Capital BlueCross testified before a Pennsylvania Senate panel Wednesday and told legislators that approval of the merger between Independence Blue Cross and Highmark could "forever close the door on a competitive statewide health-insurance marketplace."
Anita M. Smith appealed to the senators not to permit the merger of the two nonprofit health insurance giants without conditions that might permit her Camp Hill-based insurer to compete statewide using the Blue brand.
Read her testimony at Capital BlueCross' Web site.
Ah, to be paid to leave your job and then paid to take your next.
That's what it's like when companies recruit new CEOs. And Brian Duperreault, the nonexecutive chairman of Ace Ltd. , the Bermuda-based insurer with major operations in Philadelphia, is the latest to benefit.
Duperreault, 60, was hired last week by New York-based Marsh & McLennan Cos. Inc. In him, Marsh saw an executive who took Ace from a tiny insurer specializing in catastrophes into a multiline insurer.
The board of Marsh, an insurance brokerage that actually helped spawn Ace in 1985, moved fast after deciding Dec. 21 it needed to replace Michael G. Cherkasky, who had been CEO since late 2004.
Cherkasky had helped stabilize a company that was rocked by charges by then-New York Attorney General Eliot Spitzer’s office of bid-rigging and taking kickbacks from insurance companies. But shareholders last year began to grumble about Marsh's flat financial performance.
A reader points out that former Ace Ltd. CEO Brian Duperreault pledged $10 million to St. Joseph's University in early 2006.
The money was donated to help fund the purchase of Episcopal Academy's Merion campus. And it was one of the largest gifts in St. Joseph's history. (The other was a $10 million gift by James J. Maguire, another insurance industry executive, in 2005.)
At the time, the Jesuit university had said that Duperreault's gift would be honored "with a future naming opportunity."
University spokeswoman Harriet Goodheart says that Duperreault declined to have buildings named after himself or his family. Rather, he requested that the City Avenue residence halls be named for former St. Joseph's president Nicholas Rashford and Francis Borgia, "an early companion of St. Ignatius of Loyola," Goodheart said.
Duperreault is a St. Joe's alum, having graduated in 1969 with a bachelor's degree in mathematics. He is also a former member of its board of trustees.
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