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Updated 10:00 AM Sept. 18, 2006




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Sale of M-CARE proposed, expect uninterrupted coverage

The U-M Board of Regents Sept. 22 will consider a proposal to sell M-CARE to Blue Cross Blue Shield of Michigan and its subsidiary, Blue Care Network. A sale would not cause a lapse in coverage for faculty, staff and retirees, and costs are not expected to increase as a result of the transaction, leaders say.

The 400 U-M employees who work for M-CARE will be retained until the sale is finalized, after which many of them will stay at U-M, providing services to Blue Care Network under a lease agreement for a period of time through the transition. After that time, employees will be assisted in transitioning to positions at BCBSM, Blue Care Network, other areas of U-M or the community.

The nearly 79,000 employees, graduate students, retirees and dependents currently enrolled in University plans will have the option to select M-CARE during Open Enrollment for coverage through Dec. 31, 2007.

For 2008 the University would work with the Blues to provide the same level of benefits and choice as current M-CARE offerings, which would include a variety of plans. A GradCare plan also will continue to be offered by the University, and eligible graduate students can elect to enroll in it in 2007 and beyond.

Dr. Robert Kelch, executive vice president for medical affairs and chief executive officer of the U-M Health System, says the transaction itself should not adversely affect the cost of health care coverage.

"As we all know, health care costs have increased for all health plans over the last five years, including M-CARE, the Blues and other carriers. We'll have to face that challenge as a University regardless of this transaction," Kelch says.

He adds it is too early for employers or carriers to predict the cost of health care for 2008. Much will depend on factors such as the cost and use of medical services from the previous year, the introduction of new and sometimes more expensive medical technologies, the increasing use of prescription drugs and the age and other demographic characteristics of enrollees.

The University entered into talks with BCBSM because leaders felt the company would uphold M-CARE's tradition of innovation and quality despite turbulent times for plan providers.

"We believe this transaction will allow the innovative, high-quality plans and programs that M-CARE has built to be incorporated into an organization that shares many similar approaches to health coverage," Kelch says. "It will also allow the Health System to focus on our critical missions of providing exceptional care to patients, educating tomorrow's health care professionals and scientists and conducting groundbreaking research."

In addition to approval by regents, the sale—which will include all of M-CARE's HMO, PPO, HSA, Open Access, GradCare, Medicaid and Secure plans—also will be subject to regulatory approval. It is anticipated to be finalized by the end of 2006 or early in 2007.

The sale also means M-CARE members beyond the University will continue to have access to high-quality health coverage. There will be no immediate changes or interruptions to benefits for the nearly 200,000 Michigan residents currently covered by the plans. They will continue to receive health plan coverage under the M-CARE name through the Blues for the duration of their employer's current contract and through renewals for 2007 coverage. After that, they will be able to select coverage from a variety of high-quality offerings from BCBSM.

For M-CARE employees, U-M will apply its Reduction in Force policy and the federal Worker Adjustment and Retraining Notification Act will be followed, which provides for a notice of 60 or 90 days, depending on length of service.

As events unfold toward the sale date, Kelch says M-CARE administration, UMHS human resources staff and BCBSM will work together to provide more specific information about employee positions and transitions.

Technically, M-CARE and its subsidiary, M-CAID, would be sold to Blue Care Network, a subsidiary of BCBSM. M-CARE's subsidiary, Michigan Health Insurance Corp., would be sold to BCBSM.

Kelch credits M-CARE Executive Director and CEO Zelda Geyer-Sylvia with leading a team that has built M-CARE into a much-admired organization. "She, her leadership team, and all M-CARE employees have created innovative plan designs, disease management programs, online member and provider tools and other programs that have led the industry," he says.

One area of innovation made possible by M-CARE's unique position as a University-owned organization has been in health care research. U-M Medical School researchers have performed numerous studies of health care delivery, quality and other issues using anonymous data drawn from M-CARE databases—allowing them to study many issues, from mammography and colonoscopy rates to diabetes care.

Faculty members also have worked in partnership with BCBSM for similar quality improvement projects that use anonymous data from hospitals and doctors across Michigan. For example, U-M and BCBSM experts lead a heart care project funded by BCBSM that has helped save lives and dollars by improving heart procedures performed at 18 Michigan hospitals.

Under the sale agreement, U-M health researchers and quality improvement experts will continue to be able to apply for access to data collected by M-CARE and BCBSM, with appropriate safeguards for confidentiality. A variety of quality improvement initiatives funded by BCBSM and coordinated by U-M Health System faculty also will continue.

The vast majority of physicians, hospitals and other health care providers that currently participate in the M-CARE network also are part of the Blues network. So, most M-CARE members who later transition to a Blues plan will be able to retain current physicians.

Contracts that M-CARE holds with hospitals, independent physician practice associations and individual physicians and other providers still will be in effect when the sale closes. This includes M-CARE's contracts with all U-M doctors, health centers and hospitals.

Further information and updates on the proposed sale are available online at

Joint venture offers research possibilities

In conjunction with the proposed sale of M-CARE to Blue Cross Blue Shield of Michigan and its subsidiary Blue Care Network, the U-M Health System (UMHS) and BCBSM are planning a new joint venture to foster a variety of health care research and quality improvement projects that will benefit Michigan residents. Here are some key details about the proposed venture:

• UMHS and BCBSM will be equal associates, blending their missions of benefiting the public as state-oriented nonprofit organizations with solid experience in finding ways to make health care better.

• It will commission quality improvement projects and research studies that aim to improve the quality, safety, efficiency and appropriateness of health care in Michigan.

• Projects might focus on ways to help people with diabetes manage the disease, improvements in specific types of surgery, insurance plans for the uninsured or and mammogram use. Any area of health care in which there is opportunity to improve the delivery of services, get the right care to the right person at the right time, prevent medical errors, reduce risks, avoid unnecessary treatment, or get more value for dollars spent could be a potential focus.

• Projects also might include large-scale demonstration projects that will measure the impact of specific changes in health care delivery or health benefits design, such as disease management programs, to see if such a change should be rolled out to broader groups of patients.

• The venture will allow health experts from all areas of U-M, including the Health System, and from other institutions, to pursue projects under contract with the new entity. New projects will be proposed by the venture's executive director and approved by its board, which will have equal numbers of members from BCBSM and UMHS. Any use of data for research will be under the jurisdiction of the appropriate research oversight process, to protect patient privacy and rights.

• UMHS long has been a leader in finding ways to make health care better through quality improvement efforts in its own clinical operations, and by leading research and quality projects that involve many hospitals and physicians. For example, U-M doctors take part in a statewide project, funded by BCBSM, to improve the quality of breast cancer care.

• Results or findings from projects commissioned by the joint venture will be available for all health experts to share.

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