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CRITICS SAY NEW COMMUNITY BLUE PLAN HAS PROFIT MOTIVE

Community Blue's decision to exclude five hospitals and 600 physicians from its new health-insurance option was designed solely to boost profits, critics told a special state health-insurance hearing Monday.

The company's new "Advantage Option" also could destabilize the area's health-care system and devastate smaller hospitals, according to spokesmen for four of the institutions excluded from the insurance network.

Hospital spokesmen sharply criticized the new health insurance plan at a joint hearing by the Assembly Health and Insurance committees held in the Buffalo Common Council chambers.

"Draconian," was how Dr. Nancy Nielsen of Buffalo General Hospital described the company's actions in dropping five hospitals, including hers. "It was done with one need in mind alone, and that was to improve the bottom line of Community Blue, itself."

Community Blue announced the Advantage Option last month, saying it offers customers more choices, including new eye- and dental-care coverage.

But rivals of the company badly misrepresented the new plan in public, a top company official complained to Assembly members, including the chairmen of the joint hearing, Richard N. Gottfried and Alexander B. Grannis, both Manhattan Democrats.

Thomas P. Hartnett, president of Blue Cross and Blue Shield of Western New York, insisted the new coverage does not exclude any area hospitals and said his company is willing to negotiate with doctors who are not included in the coverage.

But critics said the company has made little effort to resolve the problems with excluded hospitals and that Hartnett and other company officials appeared to be "cherry-picking" the most profitable portions of the health-insurance business.

"The bottom line is where it goes. . . . This was a way to attract healthy young people and discourage the people who are chronically ill," Dr. Nielsen said, reminding legislators that state funds had been used to help rescue Community Blue financially.

The company's methods, she said, were "certainly legal, but they're not fair, and not good for Western New York."

Spokesmen for three other hospitals -- Sheehan Memorial, Newfane Inter-Community Memorial in and DeGraff Memorial in North Tonawanda -- also testified that the company's decisions cut them out of the new insurance program and will hurt them.

Clare A. Haar, a Newfane hospital executive, said the exclusions threaten rural health providers, including the only physicians in the Niagara County towns of Barker and Wilson.

Other critics testifying against the plan were Dr. Stanley L. Grossman, president, and Dr. H. John Rubenstein, both of the state medical society.

Bill Pike, president of the WNY Healthcare Association, said his group will meet Nov. 4 to discuss the new plan, but group members strongly believe health-insurance plans should follow "a fair and equitable process for choosing . . . network participants."

Hartnett, the lead witness for the hearing, insisted the plan was being attacked by critics who disagreed with his company's business practices.

"It (the option) was badly misrepresented before it even got out in the marketplace by some people that didn't want to see it become successful," he said.

Hartnett did not name the detractors but acknowledged "some tension" between Community Blue and health-care providers, including some doctors.

During questioning, Deputy Assembly Speaker Arthur O. Eve, D-Buffalo, led the criticism of the company's methods.

"The callousness of your attitude that everything is based on pure business is frightening. . . . You'll have the ability to determine who's going to grow and who's not. That is a major concern to us," Eve told the witness.

Hartnett replied that the health-care industry is a "rapidly changing environment" that now blurs the lines between insurance companies and health-care providers.

But he denied that the company has frozen out certain hospitals and doctors, saying the company's customers still can chose to use them by paying higher co-payments under Community Blue's current health maintenance organization option.

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