Many states use the proceeds from conversions of not-for-profit Blue Cross Blue Shield health plans into for-profit companies to set up foundations for the uninsured.

Now, consumer advocates worry that this practice may be jeopardized thanks to New York's decision to use the cash from one such deal to shore up the state budget.

The conversion of not-for-profit Empire Blue Cross Blue Shield to for-profit WellChoice netted the state $2 billion.

According to the New York Times, the money has been used, in large part, to increase wages for members of the Service Employees International Union Local 1199, which represents a large number of health care workers.

Legislators backing the deal say that New York doesn't need a foundation to help the poor because there are many programs already in place for that purpose.

The Consumers Union and other advocacy groups are taking the matter to court. They claim that the state illegally seized private charitable property and used it for government purposes.

"They've set a terrible precedent for other states facing big deficits," says Charles Bell, a Consumers Union official.

Other states can't help but take notice.

"As they see how big these honey pots are, that in itself will create a feeding frenzy because most states now have a not-for-profit Blue Cross with at least $1 billion — if not more — sitting in their coffers," Dan Cain, a New York investment banker who specializes in health care, tells the Times.

And these "honey pots" have the capacity to reap much more than anyone at first suspects. Take the WellChoice deal, for instance.

The state originally expected to make about $1 billion from Empire's stock.

"In November, however, when Empire transformed itself into a publicly traded company.... Wall Street paid a handsome $25 a share," the Times reports.

Meanwhile, at least two other not-for-profit insurers in the state are considering becoming publicly traded corporations. They are HealthNow of Buffalo, the parent of Blue Cross and Blue Shield of Western New York, and the Health Insurance Plan of Greater New York.

"I've been told Gov. Pataki intends to do exactly the same thing with HIP that he did with Empire," a senior government lawyer tells the Times.

Managed Care’s Top Ten Articles of 2016

There’s a lot more going on in health care than mergers (Aetna-Humana, Anthem-Cigna) creating huge players. Hundreds of insurers operate in 50 different states. Self-insured employers, ACA public exchanges, Medicare Advantage, and Medicaid managed care plans crowd an increasingly complex market.

Major health care players are determined to make health information exchanges (HIEs) work. The push toward value-based payment alone almost guarantees that HIEs will be tweaked, poked, prodded, and overhauled until they deliver on their promise. The goal: straight talk from and among tech systems.

They bring a different mindset. They’re willing to work in teams and focus on the sort of evidence-based medicine that can guide health care’s transformation into a system based on value. One question: How well will this new generation of data-driven MDs deal with patients?

The surge of new MS treatments have been for the relapsing-remitting form of the disease. There’s hope for sufferers of a different form of MS. By homing in on CD20-positive B cells, ocrelizumab is able to knock them out and other aberrant B cells circulating in the bloodstream.

A flood of tests have insurers ramping up prior authorization and utilization review. Information overload is a problem. As doctors struggle to keep up, health plans need to get ahead of the development of the technology in order to successfully manage genetic testing appropriately.

Having the data is one thing. Knowing how to use it is another. Applying its computational power to the data, a company called RowdMap puts providers into high-, medium-, and low-value buckets compared with peers in their markets, using specific benchmarks to show why outliers differ from the norm.
Competition among manufacturers, industry consolidation, and capitalization on me-too drugs are cranking up generic and branded drug prices. This increase has compelled PBMs, health plan sponsors, and retail pharmacies to find novel ways to turn a profit, often at the expense of the consumer.
The development of recombinant DNA and other technologies has added a new dimension to care. These medications have revolutionized the treatment of rheumatoid arthritis and many of the other 80 or so autoimmune diseases. But they can be budget busters and have a tricky side effect profile.

Shelley Slade
Vogel, Slade & Goldstein

Hub programs have emerged as a profitable new line of business in the sales and distribution side of the pharmaceutical industry that has got more than its fair share of wheeling and dealing. But they spell trouble if they spark collusion, threaten patients, or waste federal dollars.

More companies are self-insuring—and it’s not just large employers that are striking out on their own. The percentage of employers who fully self-insure increased by 44% in 1999 to 63% in 2015. Self-insurance may give employers more control over benefit packages, and stop-loss protects them against uncapped liability.