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Fall 2001
Medical Committee Review
By Jim Wilmot
Blue Cross Blue Shield of IllinoisThe Medical Committee hosted several workshops on industry topics that appealed to the wide interests of the attendees in Montreal.
Underwriting Incentive Compensation
John Friesen of Blue Cross Blue Shield of North Carolina presented an analysis of the incentive compensation program for the underwriters in his company. Of special note is that the underwriters and sales representatives share the same goals that are tied to the compensation program. The combination of membership growth and profitability places sales and underwriting on the same path. John emphasized the program involves a serious and total commitment from top management in all disciplines, clear concise goal targets, and a detailed communication effort prior to implementation of the program. The first year resulted in incentive payouts of 210% of the target and premium revenue for the company well in excess of target, an obvious success.
"Let's Talk Shop" - Large Group
Medical Committee Co-Chair Kim Miller and Committee member Mike Griffin led an interesting discussion. There was extended conversation among the attendees regarding the proposal process, requirements with the proposal, quality of submissions, historical data, time frames, and communication. Another item of interest was the ever-popular prescription drug topic, with some carriers using Rx as a separate benefit rather than as a part of the total health benefits. Providing offer of coverage to Professional Employee Organizationsn (PEO), participation minimums, and self-administered cases were among other items discussed.
Out of Control Prescriptions
Margaret Wear, Chief Actuary, Advanced PCS, gave an interesting presentation about the status of prescription drugs in today's industry. She addressed the incredible amount of money invested in advertising and marketing by the drug companies. Ms. Wear made special mention of advertising addressed directly to the consumer. Spending for Rx in the U.S. has doubled since 1994 and, and is expected to triple in the next decade. Controlling expenses will be a major challenge for insurance carriers, and Ms. Wear suggested increased use of mail order, continued emphasis on generics, incentives such as co-pays, and utilization management.
"Let's Talk Shop" - Small Group
Medical Committee Co-Chair Jim Wilmot led a spirited discussion of issues relating to small group cases. Most companies continue to experience problems and closely monitor eligibility, both at time of submission and renewal. Other eligibility challenges are 1099 "employees", two-person cases, two-person husband and wife cases, farms, difficulty in requesting documents to verify the validity of the business, and that all applicants are actively at work. In another hot topic, there was a discussion on when a PEO is offered a small group plan.
The Medical Committee extends sincere thanks to all attendees for their interest and participation. The Committee is planning interesting workshops for the fall meeting in Charleston, including prescription drug issues, self-funding, medical underwriting systems,systems and the always-popular "Let's Talk Shop" for Large and Small Group. We hope to see you there.
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