Highmark spending raises questions

Critics say the money should have been spent to help people get insurance.
PITTSBURGH (AP) -- Highmark Inc. has invested about $100 million in an animal cloning lab, a pharmacy and other biomedical startups and funds, prompting health care advocates to question how western Pennsylvania's largest health care insurer is spending money.
Critics claim the insurer, which operates as Blue Cross Blue Shield in western Pennsylvania and Capital Blue Cross and Pennsylvania Blue Shield in central Pennsylvania, should have spent the money to help people get health insurance.
"The historic reason for Blue Cross Blue Shield plans being developed was to meet the needs of the uninsured, to be the insurer of last resort," J. Robert Hunter, insurance coordinator for the Consumer Federation of America, told the Pittsburgh Post-Gazette in a story published Sunday.
Kate Robinson, the new executive director of the Consumer Health Coalition, claims the $100 million could have paid for a year's worth of health insurance for 32,000 people under AdultBasic, a state subsidized health care plan for people without health insurance from their jobs.
In the past two years, about 41,000 people have enrolled in the plan, but more than 90,000 more are on a waiting list statewide.
Response
Highmark officials counter that the $100 million adds up to less than 3 percent of the company's $3.9 billion investment portfolio and the investments should help improve health care and employment in the region.
"These companies had to align with our health care mission. ... The second strong factor we were looking for was local economic development," said Nanette De Turk, senior vice president for Highmark.
Under an agreement with the University of Pittsburgh Medical Center, Highmark has co-invested $50 million toward a suburban Pittsburgh assisted living home and nine companies, including Revivicor, a Virginia animal cloning lab that hopes to use pigs to provide organs for humans.
The insurer spent $96 million last year to help people get health insurance, including packages for people with medical problems that prevented them from getting coverage elsewhere and for poor people who don't qualify for Medicare, said Highmark spokesman Michael Weinstein.
Avoiding risk
Other health analysts said such investments should be allowed so long as they aren't risky.
Nonprofit health insurers playing the role of venture capitalists or economic developer "seems to be pushing the envelope of what people are expecting when they have a BlueCross Card," said Mark Pauly, chairman of the health care system department at the University of Pennsylvania's Wharton School. "I suppose it's better than Florida swampland."
The investments come as Highmark has raised premiums for some of its plans, enrollment in its plans has slid, while its reserves have climbed.
Highmark said it lost $18 million on its health insurance business last year as enrollment dropped 9 percent. But it reported an overall profit of $76 million, and its reserves grew $300 million to $2.4 billion in part because of its investments.
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