Physicians cheer Rhode Island Blues president's exit, want more change

Shortly after the Rhode Island Medical Society and other health care leaders called for his dismissal, Ronald A. Battista stepped down as president of BlueCross BlueShield of Rhode Island. But physician leaders and some politicians are pressing for additional reforms by the dominant insurer, such as replacement of the board, greater fiscal austerity, improved communication with the medical community and higher reimbursement levels for doctors.

"The mere fact that [Battista] is out of there is only one-half of the puzzle," said Steve R. DeToy, director of government and public affairs at the medical society. "The next question is what will they do now that he's gone." The Blues plan announced May 7 that its board and Battista "mutually agreed" he would resign. Battista, head of the company since 1999 and a fixture at the plan for 34 years, was replaced on a temporary basis by James E. Purcell, executive vice president and chief operating officer. The company plans a national search for a permanent successor.

Doctors in the state long had been offended by Battista's unresponsive and antagonistic style, DeToy said. A "culture and environment" flourished at the Blues plan in which the concerns of doctors were secondary to the company's financial success, he said.

According to a recent AMA study of insurance competition, the plan controls about 82% of the state's HMO and PPO market, ranking Rhode Island 49th in competitiveness for insurance markets in all states.

Shortly before Battista's exit, health care leaders appeared together at a news conference sponsored by the medical society and demanded that Battista be replaced. Tilak K. Verma, MD, president of the medical society, said Battista was "a symbol of what has gone wrong with Blue Cross."

Although initially the Blues' board said Battista had its full support, it became clear that many had become disillusioned with the company. A letter from Rhode Island Gov. Donald L. Carcieri to the board in April said "recent events have shaken the public's confidence in Blue Cross," and urged financial and management reforms.

Among those events:

• The Providence Journal revealed that Blues plan directors, executives and their spouses in September 2003 went on a weekend planning session at a Cape Cod, Mass., resort, with luxurious accommodations and parties. The event has been held annually.
• The company gave Battista two low-interest loans totaling $600,000 for personal purposes and agreed to forgive the loans if he stayed with the company through 2008.
• The board, previously unpaid, started paying its own members $12,500 a year. Board Chair Frank Montanaro was paid $25,000.
• The insurer was criticized for amassing large financial reserves, for ordering expensive ad campaigns and hiring a public relations firm.
• Purcell rankled state residents by telling a government panel that high premiums are mainly the fault of subscribers with unhealthy lifestyles.

In the days before Battista's resignation, the insurer announced reforms it called "sweeping" but which doctors and some state officials called inadequate. Several bills are pending in the state General Assembly that would restructure the Blues plan's board and impose other oversight.

Dr. Verma criticized the company's assurance that it would study whether physician reimbursements in the state are too low.

"There have been enough studies," Dr. Verma said. "Reimbursements have to be competitive, and there has to be reasonable [regional] parity."

Average reimbursements for doctors in Providence are 51% lower than for counterparts in Boston, and still lower than payments to doctors in many other New England cities, according to a 2002 study sponsored by the Massachusetts Medical Society.

Working toward higher reimbursements "is of paramount importance to our board of directors," said Michael M. Doyle, spokesman for the Blues. A financial turnaround achieved under Battista will free up more money for physician payments, he said.

"We know we have some issues to address and we now know we have the financial standing to address them," Doyle said.