Managed Care Ahead For Msc New President Says Move To Hmos Competition-Driven

The new head of Medical Service Corp. of Eastern Washington said Monday that competition, not pending overhauls of Medicare and Medicaid, is driving change in medical insurance.

Henry Keaton said purchasers of medical insurance plans are demanding restraints on premium increases. And many are shifting to plans based on managed care instead of allowing patients unlimited access to doctors, he said.

Keaton, the successor to the outspoken Fred Jacot, who retired after 13 years as president, has extensive experience developing managed health care systems.

He last directed the Midwest operations of MetraHealth, a joint effort in health insurance of Travelers Insurance Co. and Metropolitan Life Insurance Co.

MetraHealth, like MSC, sold a full spectrum of medical insurance products, but found ever more buyers for managed care.

“That’s what the customers were looking for,” Keaton said.

He has also worked for Kaiser Permanente, the nation’s largest health-maintenance organization, and founded an HMO in Chicago.

Keaton said he was attracted to MSC in part because of a holding company - called Premera - formed last year with Blue Cross of Washington and Alaska.

Premera is headed by Betty Woods, who is also president and chief executive officer of Blue Cross of Washington and Alaska.

Woods said the partners have already combined information services, public and legal affairs, and other functions in an effort to become more efficient.

But services that touch customers will remain with the operating divisions, she said.

Woods said Premera is seeking an Oregon license for HealthPlus, the subsidiary through which Blue Cross of Washington and Alaska offers a health-maintenance plan in Idaho.

The non-profit group cannot use the Blue Cross name or logo outside of Washington.

Woods said the objective is seamless customer coverage throughout the Northwest.

MSC recently received approval of a 19 percent rate increase for individual subscribers from the Washington Insurance commissioner. Blue Cross has a 22 percent increase application pending.

Keaton said group plans will not necessarily be subjected to the same increases because their claim experience differs.

HMO plans, for example, have observed a slower climb in utilization than other types of plan, he said.

Woods said Premera will be fine-tuning its product offerings as new competitors enter the Washington market and changes in Medicare and Medicaid create additional needs.

“What we have today may not be what’s needed a year from now,” she said.

MSC and Blue Cross of Washington and Alaska combined insure more than 1 million customers.

MSC employs 370, most of those in Spokane.

, DataTimes