Insurers committed to members

I agree with Christine Helfrich's statement (My View, June 6) that changes need to be made in our nation's health-care system. Contrary to popular opinion, health insurance companies, such as Regence BlueCross BlueShield of Utah, are not fighting to preserve the status quo. We are working hard to transform every aspect of our company to eliminate the confusion and tyranny that now plague our health-care system. I would like to respond to a couple of statements made in the article to clarify our commitment to our members and our efforts to contain costs.

Helfrich states that health insurance companies have 25 percent to 30 percent administrative expenses. Regence BlueCross BlueShield of Utah's administrative expense for 2004 was 8 percent of revenue and has been reduced in each of the past two years. In regards to profits, since 1994 we have averaged an annual profit of 1 percent, which, as a not-for-profit company, is deposited back into reserves to pay for future claims.

Most importantly, Regence BlueCross BlueShield of Utah does not deny legitimate claims or refuse to pay for contractually appropriate care or services. Payment is made in accordance with documents that are filed with, and approved by, the state of Utah.

In the past 10 years, our claims expense, the amount we pay health-care providers to treat our members, has nearly tripled. We now pay $830 million a year in claims expense. This figure was $310 million just 10 years ago on basically the same number of members. In 2004 our claims expense increased $102 million, or 14 percent, in just one year. This was the largest one-year increase in the past 11 years. The fact is, health insurance costs are increasing because the cost of medical care is increasing. Our administrative expense and profits make up a tiny fraction of the cost increases we are experiencing.

One reason the cost of medical care is increasing at double-digit rates is because American consumers are insulated for the true cost of care. One of our goals as a company is to involve the consumer in their own health care decisions by providing them with the information they need to be informed and effective consumers. Being more aware of cost-effective options when health care services are needed is the only way to truly slow the rising cost of medical care. If we as a nation cannot change the demand for medical care by being more accountable for our own health and being more judicious in our use of medical services, no system can provide affordable care to all citizens.

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Scott Ideson is the president of Regence BlueCross BlueShield of Utah.