By Jeffrey Barg

Published August 1998

Related coverage of the Blues

• MDs confront Highmark & UPMC

• Highmark's Blues on Call phone nurse triage program

• Blocking the merger juggernaut

• Insurer MD credentialing rationed

• Attorney General passes on Blues merger

• React to this article in the Discussion Forum.

Robert B. Sklaroff, M.D., is president of the Pennsylvania Society of Internal Medicine and chairman of the Philadelphia County Medical Society Standing Committee on Medical Economics.

PND: What is the status of the merger between the Pennsylvania Society of Internal Medicine and the American College of Physicians?

RS: This is a merger of two organizations each of which has been servicing internists for decades, one primarily from the academic, and one primarily from the socio-economic perspective. The consolidation of these two organizations will allow one voice to speak for internists both nationally and statewide. I am on the transition team and we have tentatively approved bylaws which will govern the new organization: the Pennsylvania College of Internal Medicine (PCIM). It will have two parts: a 501(c)3 and a 501(c)6, which will respectively accommodate the academic and the socio-economic interests of the former organizations. We would anticipate that the Board of Regents of the national organization ACP-ASIM will have approved these new bylaws shortly after Labor Day. Once the parent organizations of ACP in Pennsylvania and the PSIM Governing Council have approved the bylaws as well, then the consolidation will occur.

PND: How will the new organization be structured?

RS: It will mainstream the existence of governance through a presidential model, which the PSIM has maintained, with national representation through a governors model, which the ACP has maintained. We anticipate that Pennsylvania will win a third gubernatorial region quite soon in order to accommodate the population primarily in the Delaware Valley.

PND: How many members will the PCIM have?

RS: We anticipate that the total number of members in Pennsylvania will be 6000.

PND: What will be the primary agenda of PCIM?

RS: I anticipate no major change in the agenda of this organization. I feel that way because increasingly the academics and the private practitioners have seen commonality of purpose and have shared problems more so than they perceived to have been extant in the past. Therefore, we fully anticipate an activist organization will be created and will be very strong as a result of the combined membership of the two prior organizations.

PND: What has been the main focus of PSIM over your two-year presidency?

RS: PSIM has led the effort to oppose the monopolistic consolidation of Pennsylvania Blue Shield and Blue Cross of Western Pennsylvania. Not only is it monopolistic, but it also eliminated the existence of Pennsylvania Blue Shield, whose governance structure allowed physicians and patients rather than corporate-minded individuals to influence the policy of the non-profit organization. Now this governance has been wiped out and the social mission is threatened.

PND: Can you point to any specific problems which have occurred because of the merger?

RS: I think the major problem that has occurred from the patient’s perspective has been evidence of monopolistic behavior. The Blues increased indemnity rates from 8 to 30 percent last year. As far as we’re concerned, the best evidence that the Blues are enforcing a monopoly is that they have raised prices when they have had the ability to lower prices through efficiencies gained through consolidation. In Western Pennsylvania, they have just started a "Blues on Call" program through which patients are encouraged to call a nurse salaried by the insurer instead of their primary physician should they become ill. This is a gross violation of the various medical practice acts in our Commonwealth, but the regulators have failed to delay the initiation of this program. In Eastern Pennsylvania, Independence Blue Cross has unilaterally slashed reimbursement rates to surgeons, and regulators have not held hearings in order to determine whether this could yield concomitant decreases in the access to and/or the quality of medical care provided in the Philadelphia Region.

And we are concerned not only with what has occurred but what the insurance commissioner would permit to occur. For example, this November will be the two-year anniversary of the order that would permit the Blues to convert to for-profit status. In addition, various other monopolistic techniques such as "most favored nation" status will be approved within a year. And finally the CHIP program will no longer be mandated on the Blues a year hence.

PND: How have you combated the merger?

RS: We are functioning on both the national and state level in this regard. On the national level, we have been petitioning for the past two-and-a-half years for the U.S. Department of Justice to intervene in this matter. For the past nine months, I have been communicating specifically with the Health Care Task Force of the Antitrust Division of the Justice Department. I have provided them with thousands of pages of documentation regarding the abuses of the Blues against physicians and patients in the Commonwealth of Pennsylvania. About two months ago, the Justice Department decided that it was not a priority to pursue this matter further. This occurred despite the fact that its own internal economist had confirmed the accuracy of the antitrust analysis that I had provided him. This also occurred, despite the fact that at the behest of the Justice Department, I provided numerous other individuals who could corroborate my assertions. These individuals represented other medical societies, patients, competitors and industry. This was particularly upsetting when I subsequently learned that this same agency within the Justice Department is investigating physician groups at the behest of the Blues. Thus it appears that this entity has chosen to attack rag-tag groups of physicians instead of addressing the larger issues regarding control over health care delivery.

On the state level, the Pennsylvania Medical Society reversed a prior policy to oppose the consolidation on the day before Thanksgiving 1996. Within hours of having discovered that fact, the Pennsylvania Society of Internal Medicine and the Philadelphia County Medical Society organized a challenge to the regulators’ decision to approve the consolidation. We filed a complaint and we issued a request for an injunction against the consolidation. We won a unanimous Commonwealth Court Decision to have this entire matter transferred back to the Pennsylvania Insurance Department because it had not held full adjudicatory adverse-party hearings. This decision was rendered on August 12, 1997 and we held oral arguments on its impact this past January, but the Insurance Department continues to stonewall any effort to rectify its gigantic, embarrassing error. We are in the process of preparing a filing to the Pennsylvania Insurance Department not only to discover key documents related to its approval of the consolidation of the Blues, but also to file Unfair Health Insurance claims against "Highmark."

PND: What is it that you ultimately hope will happen?

RS: I want to restore Blue Shield to its former prominence. That way patients and physicians will be able to regain influence over policy that the Blues are now essentially enforcing statewide.

PND: What else has PSIM worked on?

RS: We created an alliance with the Pennsylvania Academy of Family Practice and the Pennsylvania chapter of the American Academy of Pediatrics in order to form the Primary Care Coalition, the membership of which is larger than that of the Pennsylvania Medical Society. The Primary Care Coalition has primarily been focused on deficiencies of the managed care bill. For example, we were very concerned that medical necessity was not defined and that the definition of a primary care physician was not provided in this legislation. These points were made in distinction to what the Pennsylvania Medical Society decided was a priority.

In addition, we created a primary care task force, which includes non-physicians, and we have had meetings in Harrisburg with these individuals over the past two years, primarily related to the provision of Medicaid services.

PND: What unfinished business will you leave at the end of your term?

RS: The PSIM has adopted no position regarding my idea for a Pennsylvania Physician’s Guild. This has been a battle to win the support of physicians who have been reticent despite overwhelming evidence that they must function collectively or they will perish as a profession. The effort that I have been making to restore Blue Shield is the flip side of the same coin of the necessity to empower physicians through collective bargaining. If physicians do not get into the rough-and-tumble of the negotiation process on issues that matter the most to them as professionals, then the corporate practitioners of medicine will displace them in whatever venue they think that they could function.