Use of Empire Blue Cross Blue Shield Conversion Funds Debated in New York
A New York state plan to spend most of the $1.1 billion generated by the conversion of Empire Blue Cross Blue Shield into a for-profit company on raises for workers in a "politically powerful" labor union, rather than on a charitable health care foundation, has spurred a debate in the state, the New York Times reports. The state had originally planned to use the money as several other states have: to establish a charitable foundation that would have generated millions of dollars from investments every year to be spent on health care (Strom, New York Times, 4/18). But lawmakers in January approved a plan to use a one-time cash infusion of most of the money raised by the sale to offer raises worth about $700 million over the next three years to workers covered by Local 1199 of the Service Employees International Union (American Health Line, 1/16). Robert Hinckley, deputy commissioner for operations at New York's Health Department, said, "New York has, more than any other state, I believe, already created programs to address the problems of the uninsured. Funding for those programs is sufficient and solid." But some consumer advocates are skeptical about using the funds for a short-term issue rather than creating a foundation that could generate millions of dollars for health care in perpetuity. Laurie Sobel, a Blue Cross conversions expert at the advocacy group Consumers Union, said, "What you have in New York is a quick budget fix that will satisfy health care workers for a year or two. Then the money will be gone and you'll have the same problem" (Strom, New York Times, 4/18).