CDPHP head seeks ‘rational discussion’ on health care

Dr. John Bennett was not oblivious to the challenges ahead of him when he stepped into CDPHP’s top e
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Dr. John Bennett had just joined a small group of cardiologists when his partners told him they each needed to dish out $1,000 so they could participate in a health maintenance organization being formed by about 300 area doctors.

It was 1984, and Bennett — fresh out of a fellowship at Albany Medical Center — could not afford that heavy fee to become an original subvention holder in what would later become the Capital District Physicians’ Health Plan. So his cardiology partners fronted the money for him.

Almost 25 years later, Bennett took the helm at CDPHP, succeeding Dr. William Cromie, the pediatric urology surgeon who spearheaded the drive to form the Albany health insurer. Without deep-pocketed partners to pick up the bill, many New York employers are now looking to Bennett for help in affording increasingly expensive health care.

Rough seas

“The seas are rough, especially in health care. The economy is in rough shape,” said Bennett, CDPHP’s president and chief executive officer.

Those rough seas were evident in CDPHP’s third quarter financial results, which cover Bennett’s first three months on the job. During the quarter — the most recent for which results are available — the insurer posted a net loss of $6.9 million, compared with a $10.6 million net income for the same period of 2007. During the first nine months, the insurer managed $891.7 million in health care for over 400,000 people.

The income decline — driven largely by rising health care costs — overshadowed the 11,000 members that CDPHP gained, bringing its total membership to 413,200. The insurer employs more than 800 people.

Despite rapid growth in recent years, the nation’s $2.3 trillion health care industry will probably lose much of that momentum as it trudges through the recession that started in December 2007. Health insurers will face the dilemma of juggling health care costs and employer groups that are hemorrhaging profits and bleeding workers.

Employee health benefit costs rose 6.8 percent in 2008. Those costs this year could jump by as much as 10.8 percent, but employers plan to limit that figure to 8.2 percent by shifting more costs to employees or changing health plan vendors, according to Mercer, a New York human resources consulting firm.

“Small businesses are very challenged, and what they’re doing is opting out of health insurance,” Bennett said.

But Bennett was not oblivious to the challenges ahead of him when he stepped into CDPHP’s top executive position. Cromie resigned in June due to an illness after heading the insurer for seven years.

Since 1996, he had worked “behind the scenes” on CDPHP’s board of directors. As a board member, he helped steer the insurer toward government-sponsored health plans and toward broader product offerings beyond the initial HMO format.

From 2003 to last spring, Bennett served as the board’s chairman. Just prior to filling Cromie’s position, Bennett also served as the interim CEO of the Prime Care physicians group in Albany. And he maintained his cardiology practice part time.

“Now I have one job instead of three,” said Bennett.

And it’s a job the cardiologist never envisioned he would have.

Engineering beginning

Bennett, 55, came to the Capital Region almost four decades ago to study chemical engineering at the Rensselaer Polytechnic Institute in Troy. But while volunteering at Samaritan Hospital, he found his calling.

While working in the Troy hospital’s emergency room, delivering X-ray slides and pushing wheelchairs, Bennett came to appreciate the fast-paced medical profession. The Samaritan experience put Bennett on a pre-med track by his junior year of college.

After graduating from RPI in 1974, Bennett continued his studies at SUNY Downstate Medical Center in his native Brooklyn. However, he never completely shed his engineering leanings. He was most interested in the heart, which “to a cardiologist is just a mechanical pump with a wiring system [and] valves.”

In 1983, Bennett joined the small cardiology group, where he was asked to pay the $1,000 fee to participate the fledgling CDPHP. The trio of cardiologists in 1988 merged with a similar group and formed Albany Associates in Cardiology. By 1997, Albany Associates grew into a division of Prime Care, with 100 doctors specializing in cardiology and internal medicine.

It was Dr. John “Jack” Carter, CDPHP’s first chairman, who pulled Bennett onto the insurer’s board in 1996. Carter died four years later and Bennett assumed the chairman seat in 2003.

The cardiologist, who lives in Menands, then started working very closely with Cromie, a well-known Albany surgeon who left the region in 1994 for a job at the University of Chicago Hospitals and Health System.

CDPHP directors called Cromie back to Albany in 2001 to oversee the rapidly growing insurer. Just two years earlier, CDPHP acquired Kaiser Permanente’s Northeast health insurance business and it later consolidated its offices into a new 180,000-square-foot building in the Patroon Creek Office Park.

Then Cromie grew ill and resigned.

“It caught us by surprise. Bill talked a little about when he would retire, but it wasn’t on his things to do for this year,” Bennett said of Cromie.

During Cromie’s tenure at CDPHP, the insurer’s membership rose 14 percent. But expenses piled up during the months leading up to his resignation. They contributed to the $10.3 million net loss CDPHP posted for the first nine months of 2008.

Cost-cutting

Bennett is picking up Cromie’s campaign to counter rising health care costs. But that task has not gotten any easier, with area hospitals splurging on multimillion-dollar expansions and the clout of doctor groups largely going unchecked.

Bennett blames a significant portion of those higher costs on an uncoordinated regional health care system. He noted how Albany Med and nearby St. Peter’s Hospital are both pursuing huge expansion projects, costing $360 million and $258 million, respectively. Businesses bear the burden of those projects in the form of higher premiums.

“Nobody’s looking at the big picture. Every hospital wants to build the best and the biggest things. . . . Every hospital and doctor group gets what they want,” Bennett said.

As the head of CDPHP, he wants to start a “rational discussion on health care planning” and the region is on the “edge of significant health care reform.” But his predecessor sometimes met staunch resistance when trying to usher in change.

For example, Albany Med in 2003 threatened to sever ties with CDPHP because of the insurer’s attempts to curtail hospital costs. Cromie met more resistance from a small group of psychiatrists in 2006, when the nonprofit insurer moved to outsource its mental health and substance abuse care services to the for-profit United Behavioral Health.

“I would like to be transformational to this region. Whether I can accomplish that, I don’t know. You have to aim high,” Bennett said.

In the meantime, CDPHP in 2009 will roll out new health care technology for its own operations, such as a core claims processing system and enterprise data warehouse. They will help the insurer better identify trends and at-risk members.

Using that technology, CDPHP will work with doctors and hospital to provide early and appropriate intervention to better head off health problems at their onset.

While it is unlikely CDPHP will be able to prevent health care costs from rising, Bennett hopes he can keep annual hikes out of the double-digit range. In regard to health care costs, he said this year’s system conversion will be “more than a shave off the top.”

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