Fifty cents.

About the price of a can of soda pop or a candy bar in 1988. Or how about a hamburger during a special sale promotion.One would hardly think of a month's worth of health insurance for 50 cents, especially to cover the cost of today's expensive hospital and doctor services.

But back in the 1920s, when the group health insurance concept was born, 50 cents bought a month's worth of health insurance at Baylor University, regarded as the birthplace for group health insurance.

From that modest beginning, today's health insurance business has grown into a multi-billion dollar business in the United States, and health insurance has become one of the staples in a company's benefits for its employees.

One of the oldest health insurance companies in the United States is Blue Cross and Blue Shield, and its affiliate in Utah is now the largest health insurance provider in Utah with 362,000 members.

In the 1920s, just before the Great Depression, Dr. Justin Ford Kimball, vice president of Baylor University, conceived a plan for his staff to help defray the cost of medical services.

Each person paid 50 cents monthly to the university's hospital to cover all hospital care costs for 21 days if the need for such care ever arose. The plan was an immediate success. Other groups formed and made arrangements with hospitals.

In the next few years, refinements were made in the program, and in 1933, E. A. Van Steenwyk, an executive of the Minnesota Hospital Services Association, began using a blue cross on his stationery. A blue cross was used to distinguish the program from the services of the American Red Cross.

It was only natural the new plan was titled Blue Cross, and within 10 years more than 3 million people were members of Blue Cross plans across the country. Blue Cross is the plan covering hospital costs. Blue Shield pays for physicians' services.

Forerunners of Blue Shield appeared at the turn of the century in isolated lumber and mining camps in the Pacific Northwest when large companies contracted with doctors to visit the camps and provide medical treatment for the workers on a monthly, prepaid basis.

Later, medical societies began contracting with employers on behalf of their members, enabling patients to retain their choice of physician, according to Michael N. Mitchell, vice president of marketing for Blue Cross and Blue Shield of Utah.

In 1936, the American Medical Association endorsed the principle of voluntary health insurance. Soon, medical societies all over the country began organizing similar payment plans. Each plan was organized as a separate corporation, but their common bond was that each was sponsored by the local medical profession.

The Blue Shield symbol appeared for the first time on the Buffalo, New York, plan in 1939 and soon was adopted by all prepaid health insurance plans.

In 1942 six Utah hospitals organized the Intermountain Hospital Service Plan, and Blue Cross got off an impressive start with 4,000 members. Two years later, the Medical Service Bureau of the Utah State Medical Association was activated and Blue Shield was born.

What was life like in the early days of Blue Cross and Blue Shield of Utah? Gordon E. Pugh, senior director of special and national accounts can provide some insight. As a new employee, he came to work thinking the company's business was selling hospital equipment.

Pugh said the Intermountain Hospital Service Plan was located at 241/2 E. First South and the Medical Service Bureau of the Utah State Medical Association was located in a converted house at 42 S. Fifth East. Pugh used a motorcycle to shuttle papers between the two buildings that housed a total of 32employees, a far cry from the 605 Blue Cross and Blue Shield employees in 1988.

Recalling that the staff operated in a "family atmosphere," Pugh said Louis G. Hersey came to Salt Lake City in 1949 to be the Blue Cross and Blue Shield executive director after working for Blue Cross and Blue Shield of Michigan. He said Hersey was a frugal man and remembers him saying the company was the "steward of the subscriber's money."

Jed H. Pitcher currently is the president and chief executive officer. He joined the company in 1967 as a cost accountant and worked his way through several jobs until his election as president in 1981.

Pugh recalls taking between 50 and 60 claims to the Fifth East building threetimes weekly when he first started, but now the company handles two million claims annually or 38,442 weekly. The company paid out $1 million in claims in 1955,but that has ballooned to $167 million annually.

Health insurance premiums have increased in the intervening years, but they are necessary to cover some rather hefty benefit payoffs, according to Kevin Bischoff, assistant vice president.

For example, Bischoff said many people thought a $1 million payoff was "wayout of sight several years ago," but recently the company paid out $869,000 forcare of a premature infant.

When Pugh started with the company, it didn't have competition in the health insurance field. "Because it was the only game in town, our salesmen didn't have to convince an employer to take our insurance. They needed to convince the employers that health insurance was a necessity," he said.

With the health insurance business expanding rapidly in the 1950s, company officials decided to build their own building at 2455 Parleys Way, and in 1968 the company purchased a building to the east for expansion. Now Blue Cross and Blue Shield has its marketing and actuarial office in the Triad Center and also has regional offices in Ogden and Provo.

Blue Cross and Blue Shield of Utah belongs to the Blue Shield Association, the national coordinating agency for all similar plans in the United States with more than 80 million members. The connection with the national group gives the Utah organization the right to use the Blue Cross and Blue Shield symbols.

Although the Utah organization retains its autonomy and operates under state law, all of its plans must meet national association standards and gain approval annually. Dues to the national association are based upon the number of national contracts in force.

Bischoff said the Blue Cross and Blue Shield concept is unique in the health insurance field because subscribers' medical bills are sent directly to the company, and the patient never has the tedious job of filling out claim forms.

"Our claims adjudicators spend their time reimbursing doctors and hospitals for the service they provide our subscribers. Should there be any questions or discrepancies between the patient and the doctor on how we have processed the claim, we have a full-time complement of customer service representatives, public relations and professional relations staff to work with the parties involved," Bischoff said.

In the ever-changing face of the health insurance business, in 1981 Blue Cross introduced HealthWise, a health maintenance organization where members receive more extensive benefits than under the traditional insurance.

Another subsidiary of Blue Cross and Blue Shield is ValueCare, a preferred provider organization allowing members to patronize any doctor or hospital they prefer, but they can save more if they limit their health care needs to medical specialists participating in the program.

The company also is the provider of MediCare in Utah for the federal government. Blue Cross and Blue Shield offer the Security 65 program that provides protections for senior citizens when Medicare coverage ends.

Mitchell said the company has plenty of competitors, but the survivors will be those health insurance companies providing the best coverage and the best claim service. He believes only the largest companies will survive because of increasing costs.