Mike Reitz has been the president and CEO of Blue Cross and Blue Shield of Louisiana since April, but he’s been with the company for three decades—including two stints as its interim president.
Reitz, who had served as senior vice president and chief marketing officer since 2000, was named interim president and CEO in August after the departure of Gery Berry. Reitz also filled the interim position for nearly a year in 2004.
When he started with the company, Blue Cross might have paid $150 for an appendectomy or $1,500 for brain surgery. “Today, $1,500 might get you a single pill in some of these specialty drug therapies being introduced in the market,” he says.
1. Do you think a government mandate to buy health insurance, for individuals or for businesses, is a good idea?
There are more pieces of the health care reform initiatives that we all agree on than the very few pieces that we disagree on. [The health insurance industry] agreed to guarantee issue to everyone regardless of medical condition without a waiting period for pre-existing conditions. The caveat is that everyone must purchase insurance, so it’s a mandate. If we’re going to make it available to everyone, we need to be able to get a good spread of risk. We need to get the “good” people along with the “bad” people.
2. But if you have a mandate to buy insurance without a public option to keep the industry honest, wouldn’t that just be a windfall?
We see no value in a government-run plan. The objective of that plan would be to re-engineer a health care plan to disrupt access to care and disrupt the current quality system we have in place today.
3. Would a public option run you out of business?
The details would determine whether or not that would happen. It could start by creating a two-tiered system and eventually, depending on the way the government runs their plan, would determine the fate of the insurance industry. For example, if the government uses current Medicare levels of reimbursement to establish their premiums, those levels are significantly less than what the private market pays today. So it’s been estimated that their product would be priced 30% to 40% less than the commercial market. A number of people would flock to the government plan, and it would just create a death spiral for the commercial plans.
4. Some say the public option is the back door to a single-payer system. Would that be such a bad thing? Other industrialized countries do it that way.
There’s obviously money to be saved when you go to a single-payer system, but what you’re going to do is sacrifice access to quality health care. I don’t think you can point to another industrialized nation that’s on a socialized type of health care plan and say that plan operates successfully in the eyes of the consumer.
5. But those countries with single-payer systems are democracies. Apparently there is broad support for those systems, or the public would force a change.
They could get rid of it, but if all of a sudden they wanted to reintroduce and redesign a health care system once it’s dismantled, it becomes very difficult to create that system again. When all of a sudden your doctors begin working for the government, you begin to challenge the current stream of talent that goes into medicine as a profession.
6. Critics say the insurance industry just doesn’t want to compete with a public plan. The American Medical Association says the vast majority of health insurance markets are dominated by one or two health insurers. Who is your competition?
Aetna, CIGNA, United, Humana, Coventry, local HMOs, Health Plus, Vantage and a host of other smaller carriers. How many plans do you need? Do you need 500? Do you need 10? I think that competition is pretty much responsible for keeping the insurance industry in a responsible financial mode.
7. Do we have a true free market for health insurance? Say I’m a business owner who provides health insurance, and I have employees with pre-existing conditions. Can I realistically drop my insurance company and go find another one?
Yes, you can. In Louisiana, we have small business rating laws which guarantee that we will issue a policy. It enables us to rate up depending on the medical conditions, but you can get coverage. And then there are the portability laws that were passed a few years ago where you come to the new plan and you get credit for waiting periods served under the previous plan.
8. So you would argue lack of competition isn’t a problem in Louisiana?
We take great pride here in Louisiana in the fact that we’re an individual, small-group state. We have a tremendous portfolio of products to meet whatever the economic needs are of our membership, and we have products available statewide, in urban as well as rural markets. I don’t think lack of access is a problem. Affordability is the problem.
9. What are some other reform ideas that you do like?
We need to standardize some of the administrative functions within the insurance industry. There’s a tremendous need for us to standardize electronic medical records. We could assist our providers with some tort reform initiatives, so they don’t have to practice defensive medicine. The government could encourage the marketplace to participate in wellness and behavior-modification programs.
We have to reform the way providers are paid. Right now, provider payments in Louisiana are based on volume incentives. The more times you provide services, the more opportunity you have to seek third-party reimbursement. We need to begin the migration to a system that’s based on improving outcomes of a particular population.
10. Last year, the relationship between Blue Cross and Franciscan Missionaries of Our Lady [which runs Our Lady of the Lake Regional Medical Center among others] nearly ended in a dispute over reimbursement costs, which would have been bad for everyone involved. Can we prevent what almost happened then from happening in the future?
The struggle that we often find ourselves in is meeting the income needs of a provider like a hospital and the needs of our membership. We are in constant conversation with our provider groups, trying to make sure they understand the balance between their income needs and the needs of our customers.
THE REITZ FILE
Title: President/CEO, Blue Cross and Blue Shield of Louisiana
Hometown: Baton Rouge
Education: LSU (1976)
Professional experience: Provider affairs representative, Blue Cross and Blue Shield of Louisiana, 1976-80; Louisiana Health Maintenance Plan, BCBSLA, 1980-81; Director, provider affairs, BCBSLA, 1981-84; Assistant vice president, individual sales and public affairs, BCBSLA, 1984-86; Vice president of individual sales and government relations, BCBSLA, 1986-90; Vice president of corporate development/major account executive, BCBSLA, 1990-91; State manager, MediPak USA USAble Life, 1991-95; Vice president of individual sales and marketing, BCBSLA, 1995-2000; Senior vice president and chief marketing officer, BCBSLA, 2000-09; President/CEO, BCBSLA, 2009-present
Noteworthy: Also served as interim president/CEO in 2004 and from 2008-09
