Seeking common ground: a history of labor and Blue Cross.

In recent years, voluntary health insurance costs have become a major source of friction in labor-management negotiations. What was once a "fringe" has led to job actions, strikes, and intensive bargaining. We examine the history of labor's participation in New York Blue Cross from the 1930s to the recent past and show that labor's participation in the plan was crucial to Blue Cross's success in the plan's early decades. By the late 1950s, serious tensions developed over rate increases and the participation of labor in Blue Cross governance. Ultimately, the issue was one of the control over what was provided by the plans and who would pay for the costs of care. We posit that labor was never able to achieve an important role in the control of the third-party payer, and in the antilabor environment of the 1980s this proved detrimental to labor's interests.     

New York's Blue Cross and Blue Shield, 1934-1990: the complicated politics of nonprofit regulation.

The story of New York Blue Cross is one of complex interaction with state and federal regulators and also with hospitals, the medical profession, commercial insurers, and the public, who make up the regulatory environment. Negotiation, cooperation, and adaptation among parties whose goals and assumptions were partly parallel characterize the relationships. As we can see from New York Blue Cross's origins and its role in the development and administration of certificate-of-need legislation, Medicare, insurance practice and regulation, and hospital rate setting, this story does not represent the capture of government by a special interest, nor the gradual souring of a public interest organization, nor disinterested and distant government regulation.     

The competitive effects of health maintenance organizations: another look at the evidence from Hawaii, Rochester, and Minneapolis/St. Paul

There has been much discussion about the potential cost-containing impact of HMOs upon the local medical care market. Three areas have been identified by various observers as experiencing such beneficial effects: Hawaii, after the development of Kaiser in the late 1950s; Rochester, New York, which experienced rapid HMO growth and declining Blue Cross hospital use in the late 1970s; and Minneapolis/St. Paul, which has been the focus of vigorous HMO competition in the last decade. While comprehensive data on health care expenditures are not available, bits of evidence can be pieced together to develop case studies of each area. Careful review of the available data often identifies internal inconsistencies and contradictions, but in none of the three sites is there a reduction in hospital use that is most plausibly attributed to HMO competition. Instead, the reported reductions are in each case attributable to other factors--including biases in data, long-term trends predating HMOs, indirect effects of other policy changes, and other forms of competition.     

The conversion and settlement of Georgia Blue: are consumer groups still singing the blues?

As more Blue Cross/Blue Shield Organizations employ various means to convert to for-profit status, myriad issues arise concerning the proper treatment of assets that were accumulated during the not-for-profit years of such organizations. Moreover, state officials face pressure from all sides to assure that the conversion process is "fair." In the following Article, the author examines the conversion of Blue Cross and Blue Shield of Georgia to demonstrate the various conversion issues that arise under traditional legal principles--as well as the means by which that Blue employed newly enacted legislation to avoid many of the requirements that otherwise would have attended its conversion.     

A cure for the Blues: resolving nonprofit Blue Cross conversions

This Article analyzes the issues involved in converting nonprofit Blue Cross organizations to for-profit status. These issues have arisen in the context of litigation regarding the "reorganization" of Blue Cross and Blue Shield of Missouri ("BCBSMo"). BCBSMo had reorganized by creating and transferring a majority of its business to a new for-profit subsidiary. Missouri consumer groups and state regulators characterized the "reorganization" as a conversion requiring BCBSMo to transfer its assets to a foundation dedicated to charitable health purposes. BCBSMo, however, denied that it had any obligation to leave behind its assets in the nonprofit sector. The BCBSMo litigation raises issues common to most conversions of nonprofit healthcare organizations, particularly conversions of nonprofit Blue Cross plans. This Article provides a road map for state regulators and the public to follow in ensuring that the public interest is fully protected in such conversions.     

Hospitals, finance, and health system reform in Britain and the United States, c. 1910-1950: historical revisionism and cross-national comparison

Comparative histories of health system development have been variously influenced by the theoretical approaches of historical institutionalism, political pluralism, and labor mobilization. Britain and the United States have figured significantly in this literature because of their very different trajectories. This article explores the implications of recent research on hospital history in the two countries for existing historiographies, particularly the coming of the National Health Service in Britain. It argues that the two hospital systems initially developed in broadly similar ways, despite the very different outcomes in the 1940s. Thus, applying the conceptual tools used to explain the U.S. trajectory can deepen appreciation of events in Britain. Attention focuses particularly on working-class hospital contributory schemes and their implications for finance, governance, and participation; these are then compared with Blue Cross and U.S. hospital prepayment. While acknowledging the importance of path dependence in shaping attitudes of British bureaucrats toward these schemes, analysis emphasizes their failure in pressure group politics, in contrast to the United States. In both countries labor was also crucial, in the United States sustaining employment-based prepayment and in Britain broadly supporting system reform.     

The impact of prospective payment: a multi-dimensional analysis of New Jersey's SHARE program

The SHARE program, which set per diem prospective rates for New Jersey hospitals during the period 1975-1982, is evaluated. Analysis suggests that this program did contain hospital cost increase. However, the program threatened the viability of most inner-city hospitals. Indirect evidence suggests that there was cost-shifting in response to this program, which regulated payment for only Blue Cross and Medicaid patients. Structural features of this program and its successor, the New Jersey DRG program, are analyzed; and implications for the Medicare prospective payment system are examined.     

Capture and culture: organizational identity in New York Blue Cross.

This article explores the changing corporate culture of New York's Blue Cross and Blue Shield plan in its first fifty years. As the plan grew, corporate culture evolved over four sequential phases: the plan first had the character of an experiment, then that of a movement, a business, and, most recently, a corporate agglomerate. Accompanying this evolution has been an identity crisis, as the need to adapt to a turbulent environment has challenged the plan's settled understanding of its core values, namely, voluntarism, community, and cooperation.     

Special report on liability and insurance. An update on assignment of patient benefits under ERISA

While the holdings in Davidowitz and Arkansas Blue Cross & Blue Shield arose in different contexts, they both reflect the courts' increasing willingness to consider the importance of cost containment in the health insurance arena, even though patient accessibility to health care may be restricted as a result. If the holding in Davidowitz is not successfully appealed, providers may need legislative relief in order to retain their ability to take valid assignments of patient claims for payment from ERISA plans. It is uncertain whether such legislation can be sought at the state level or must instead come from Congress due to ERISA preemption of state legislation. Clearly, the district court decision on remand in Arkansas Blue Cross & Blue Shield will be closely watched for any light it may shed on this question. On a pragmatic note, providers who have not entered into "participation" agreements with insurers or other private payors may now have a greater incentive to do so, and "nonparticipating" providers who continue to obtain assignments from patients in order to collect directly from insurers or other private payors should determine on a case-by-case basis whether the source of the patient's benefits is a group health plan--which is likely to fall under ERISA and may contain nonassignment provisions--or some other form of coverage. For an additional perspective on insurers' responses to copayment waivers, see Newsletter, Vol. 6, No. 10, October 1991, at 7.     

The public presentation of Blue Cross, 1935-1965.

I explore the public presentation of Blue Cross, examining in detail the political, cultural, and institutional messages that shaped its advertising. Blue Cross advertisements had the twin purpose of attempting to increase the number of its own subscribers while criticizing the idea of a national health insurance policy. These twin aims did structure the Blue Cross campaigns but may well have worked at cross-purposes.     

Local Governance and Redistributive Policy: Explaining Local Funding for Public Defense

In many American states, public defense is provided at the county rather than state level (Langton & Farole 2009 ). Local governments have discretion over implementing and funding the right to counsel, resulting in considerable variability in programs and funding levels. Placing this issue in the theoretical context of redistributive policies and politics, we investigate decisions on funding this service across upstate New York counties. Using as a point of departure Paul Peterson's classic explication of community politics, we first model variation in funding as a function of counties' fiscal capacity, need for services, and costs of supplying legal representation. We also test Peterson's prediction that local political factors will play little if any role in budget decisions. Second, through interviews with program administrators we explore the characters of twelve defender programs in which expenditures departed from the model's predictions. We find that three factors—which we term “influence,” “infrastructure,” and “ideas"”—also vary directly with levels of funding. We conclude with a discussion of the implications of these findings for theoretical thinking about due process policies and local politics, and for policy debate over how best to ensure adequate counsel in criminal court.     

Shining Some Light Back on the Dark Ages: New York State's Early Environmental Law and Its Implications for Today's Environmental Insurance Coverage Disputes

While many environmental practitioners consider the passage of the Resource Conservation and Recovery Act in the 1970s and the Comprehensive Environmental Response, Compensation, and Liability Act in the 1980s as the dawn of modern environmental law, New York State has a robust body of antipollution law that predates those federal statutes by decades. By the turn of the twentieth century, New York State statutes, embracing well-established common law principles, contained limitations on the disposal of harmful industrial waste into the waters of the state. The New York State Public Health Law required permits for certain discharges of industrial waste, and the common law provided injunctions and monetary damages for those injured by environmental pollution. This body of law should not be overlooked during coverage disputes over historical environmental contamination because it documents an awareness by the state legislature of the impact of pollution on both surface and groundwaters of the state, and because it demonstrates that harmful unpermitted discharges were prohibited by law since the beginning of the twentieth century.     

Women and arson: a demographic study

This study describes women accused of setting fires in the City of New York who were evaluated between 1980 and 1983 at the Forensic Psychiatry Clinic for the New York Criminal and Supreme Courts. Consideration is given to their age, ethnicity, history of prior mental illness, abuse of controlled substances, economic status, family background, education, and employment. Their methodology, planning, and targeting for their firesetting behavior, as well as reported motivations for engaging in arson, are also considered.     

Certificate-of-need in an antitrust context

Recent cases such as National Gerimedical Hospital and Gerontology Center v. Blue Cross of Kansas City have found that certificate-of-need (CON) legislation did not intend to remove antitrust considerations. This note discusses the exemptions from antitrust provided by the state action doctrine of Parker v. Brown as well as the Noerr-Pennington doctrine, both of which appear to protect provider input into the CON process. Providing information that assists decision-making must be carefully distinguished from providing data that serve the interests of physicians and hospitals.     

Coastal Land Management in Florida

During the 1970s, the Florida legislature enacted some of the nation's most innovative and comprehensive state and local land-planning and regulatory programs. The Environmental Land and Water Management Act of 1972 adopted large parts of an early draft of article 7 of the ALI Model Land Development Code, thereby asserting a state regulatory role in areas of critical state concern and for developments of regional impact; Florida's Local Government Comprehensive Planning Act of 1975 introduced planning and regulatory innovations that, if ever fully implemented, could place Florida in the vanguard of land regulatory reform at the local governmental level. This study, which is the concluding part of a study of the evolution of federal, state, and local regulatory roles in the management of coastal land resources, examines the intergovernmental, interagency, and separate-branch tensions that have emerged as Florida moves to implement its new laws. Included, inter alia, is an analysis of the Florida Supreme Court's controversial nondelegation decision in Askew v. Cross Key Waterways. Although Florida can claim some limited successes in program implementation, its land management systems are still not adequately integrated and coordinated, and they have not been implemented as successfully as their proponents thought possible. For example, the state has several alternatives for complying with the federal requirements for an approved management program under the Federal Coastal Zone Management Act of 1972—the comprehensive land management system examined in this study being only one of the available ones. Yet Florida still has been unable to obtain federal approval, and, if it ever does, will be one of the last of the major coastal states to do so. Much of Florida's difficulty in forging a well-integrated coastal land management process is attributable to substantial disagreements on two basic propositions: because of Florida's unique ecological characteristics, coastal land management should not be divorced from comprehensive land management for other purposes; and because of substantial regional diversities within the state, coastal land management in Florida should include a significant planning and regulatory role for local governments as well as for regional and state agencies.     

The Tension Between State Interests and Municipal Zoning Rights in the Realm of Fracking Regulations

This article examines whether local municipalities should have the capability to exercise their home rule authority to ban fracking within their jurisdiction, or whether state law should preempt such acts. The Court of Appeals of New York has found that individual municipalities do have the authority to ban fracking, while the Supreme Court of Colorado recently upheld a district court decision that held that the state's Oil and Gas Conservation Act preempted a town's ability to declare an outright ban. These divergent positions could lead to interesting legal battles as natural gas continues to play a larger role in energy portfolios, while public health concerns grow.     

Hospital utilization review: past experience, future directions

Utilization review (UR) programs seek to determine whether specific services are medically necessary and whether they are delivered at an appropriate level of intensity and cost. Although UR programs have been operating for more than 40 years, they have changed dramatically during the past two decades. Today, many health care providers, analysts, and policymakers view UR as a possible solution to hospital inpatient cost and quality problems. This paper addresses how UR has evolved, how UR is used today by different delivery mechanisms (i.e., Medicare, health maintenance organizations, preferred provider organizations, Blue Cross, and commercial insurers), the cost effects of various UR approaches, and how UR will be used in the future.     

From Apalachin to the Buffalo Project: Obstacles on the path to effective federal responses to organized crime, 1957–1967

The Apalachin meeting of recognized underworld leaders from cities across the USA was held in upstate New York on November 14, 1957. The event, well known to historians and justice system officials, has become a textbook case rarely examined for its larger context of how American government officials learned to confront the organization and strength of the American Mafia, later called La Cosa Nostra (LCN). From 1957 to 1967, three presidents, four attorneys general, and hundreds of federal agents and prosecutors traveled an obstacle-filled path toward investigating, indicting, prosecuting, and convicting Apalachin attendees and their successors. Steps were taken to challenge the power of the mob during the Eisenhower and Kennedy administrations, but they were consistently plagued by false starts, frustrations, and side steps. Each obstacle further instructed policy makers, however, on the need for an intensive and coordinated effort grounded in common goals and interagency cooperation. This article considers six key obstacles to the decade-long quest for a concerted federal initiative against organized crime. It examines how the characteristics and the impact of each obstacle contributed to a meandering and slothful federal response to the Mafia’s power. Lessons learned about how to effectively attack the mob were finally implemented in May 1966 when President Johnson institutionalized Executive agency cooperation, making the Attorney General (AG) the focal point in the war on organized crime. One element in this new initiative was known as the ‘Buffalo Project,’ an experiment commencing officially in January 1967 in Buffalo, New York to concentrate intelligence, investigations, and prosecutive resources working across bureaucratic lines to pursue guilty pleas or convictions. The Project, a closely supervised operation directed by the Justice Department’s Organized Crime and Racketeering Section (OCRS), was conceptualized as a small team of supervisory federal investigators and experienced prosecutors who built cases against local Mafia associates and leaders to withstand the scrutiny of the federal justice system. Assistance was also rendered by state, local, and international organizations. The Project formed a template for the DoJ Criminal Division’s Strike Force program.

Blue Cross/Blue Shield-sponsored prepaid individual practice

The HMO is no longer a fledgling idea in the Blue Cross/Blue Shield System. There are 45 Blue Cross/Blue Shield Plans throughout the country which sponsor a total of 54 HMO programs with about 1,040,000 members. Among those 54 programs are staff models, group models, Individual Practice Associations (IPAs), and other structures. This analysis is confined to the Minnesota affiliate corporation, "HMO Minnesota."     

Regulating hospital labor costs: a case study in the politics of state rate commissions

With the advent of various attempts to control hospital costs by direct state regulation, labor input costs have become a target of particular attention. This focus is due in part to the unique discretion administrators can exercise over labor factors, and in part to the large absolute part of hospital resources devoted to labor costs, conservatively estimated to be about 55 percent of total budget. This paper examines the impact of state efforts in prospectively setting rates on collective bargaining outcomes in the hospital sector. Specifically, bargaining in New York, Maryland and Connecticut is examined. The paper concludes that government attempts at controlling costs have, in all cases, required the regulatory bodies to consciously exert influence on the collective bargaining process. Further, while such attempts seem to be within the paradigm of multilateral bargaining, there are significant distinguishing features in the role hospital regulatory bodies play in the bargaining process. These variations from the multilateral paradigm may impede the long run ability of rate review efforts to control bargaining outcomes with respect to wages.