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To the Editor:The article by Ms Friedman1 on the future of Blue Cross and Blue Shield (BCBS) significantly misses the mark. It fails to make clear that the conversion controversy is more about regulators and consumers preventing nonprofit BCBS plans from taking public assets for use in the for-profit sector than it is about the survival of individual insurance companies. Conversion is not simply a technical corporate change, it is about the preservation of billions of nonprofit charitable dollars and how these dollars should be used to protect and improve communities' health.
Nonprofit entities, including the majority of BCBS plans, are not owned by their boards, executives, or officers. The public is effectively the "shareholder" of a nonprofit organization's assets. In almost every state, the law requires a nonprofit organization's assets to be "irrevocably dedicated" to nonprofit purposes. When the company changes to a mutual or stock insurance company, nonprofit assets must remain focused on the broad public mission, not used for executive compensation or any other private interests.
Blue Cross of California (BCC) first attempted to convert its nonprofit assets by establishing a for-profit subsidiary and using its assets to benefit private individuals, but BCC did not recognize its own nonprofit, public obligations. It was only after regulators, community groups, and legislators became involved that BCC was required to preserve all its assets—$3.2 billion—for the benefit of the public.2 Two foundations were established with these funds to focus on health issues in California.
In the end, the BCC conversion was a win-win situation—it benefited the public and the new for-profit company. Since the conversion, the price of the for-profit stock has more than doubled and the value of the foundations' endowments now exceeds $4 billion (as of July 1998).2 Consumers Union's West Coast Regional Office was the leading consumer group in the BCC case and has a national project with the health care consumer organization Community Catalyst to preserve charitable assets.
The article by Friedman purports to discuss the almost 70-year history of the BCBS plans, but it does so primarily from the perspective of BCBS plans as business entities. It does not, however, adequately address the impact BCBS plan conversions have on their communities. The question in the title of Friedman's article should not have been "What Price Survival? The Future of Blue Cross and Blue Shield," but rather "What Price Survival? The Future of Nonprofit Health Assets." If BCBS plans no longer want to be nonprofit corporations, the question for all of us to consider is who should control the billions of charitable health care dollars that belong to the public?
This letter was shown to Ms Friedman, who declined to reply.—ED.
Country-Specific Mortality and Growth Failure in Infancy and Yound Children and Association With Material Stature
Use interactive graphics and maps to view and sort country-specific infant and early dhildhood mortality and growth failure data and their association with maternal
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