Blue Cross has a plan to lower PPO costs ,in the Healthcare column

PacifiCare Launches Generic Program; Watson Makes Acquisition

Blue Cross of California officials are banking on a new healthcare service plan designed to attract new members and retain existing ones. The insurer has redesigned preferred-provider organization plans for more than 477,000 individual customers, including about 107,000 in Orange County.

Blue Cross of California’s PlanScape will have average monthly prices of $105 per member. New enrollees will have their prices guaranteed through the end of 2001. Plan officials have estimated that PlanScape would lower the average monthly premium costs by $19.

Members often see PPOs as offering more choice in terms of physicians and specialist access than other managed care plans, particularly health maintenance organizations. Figures from a William M. Mercer Inc./Foster Higgins health plan study showed PPOs’ national healthcare market share at 43%, up 12% from three years ago.

PlanScape came about after Blue Cross officials decided against hiking premiums on its individual PPOs, said Jim Ebbitt, the Thousand Oaks-based insurer’s senior vice president in charge of individual business. “If you continue to increase premiums, it makes the plans unaffordable,” he said. “Fewer people will let their coverage lapse if it’s kept affordable.”

Even though PlanScape touts affordability, it comes at a cost to its members,if they want a lower premium, they have to share a greater portion of the costs. Plans with higher premiums are being offered for members who are concerned about out-of-pocket charges.

Ebbitt said that PlanScape provides up to $5 million lifetime coverage after meeting maximum out-of-pocket costs of $5,000. “If you have a significant illness, you do not have to deplete” resources, he added.

Blue Cross will use insurance brokers to market PlanScape, Ebbitt said. “We will work with the agents, have seminars for them.”

Lowering prices is not an uncommon strategy within the PPO landscape, according to the Washington, D.C.-based American Association of Preferred Provider Organizations, a trade group. “For those companies that are only PPO, it’s a way of life,” said Karen Greenrose, the association’s president.

Greenrose said companies that offer PPOs and other forms of managed care companies may be putting more effort into their PPOs because they’re finding that enrollment is growing faster in those plans rather than in more restrictive ones.

PacifiCare Launches Drug Program

Prescription Solutions, a Santa Ana-based pharmacy benefit management company, introduced a new program called FirstLine Solutions. Prescription Solutions is a subsidiary of Santa Ana-based PacifiCare Health Systems Inc.

FirstLine Solutions’ goals include measuring the qualitative and quantitative impact of “first-line” medications in a managed care setting. First-line medications, in this context, refer to generic pharmaceuticals used for therapeutic purposes.

Ed Feaver, Prescription Solutions’ president and chief executive, said the program was developed to increase the quality of care provided to members and to make prescriptions more affordable for managed health plans. A six-month pilot program showed savings of up to 12% in per-member, per-month costs across therapeutic antibiotics, gastrointestinal and hypertension medications and annualized combined net savings of $120,000 for the groups tested, according to Prescription Solutions.

Watson Buys Kidney Drug Company

Watson Pharmaceuticals Inc., Corona, entered into a definitive agreement to acquire Marina del Rey-based Makoff R