Important News to Share about M-CARE

Colleagues,

I have important information to share with you regarding our Health System. After careful consideration and using our long-term strategic direction as a guide, we are proposing to sell M-CARE to Blue Cross Blue Shield of Michigan and its subsidiary, Blue Care Network of Michigan. The proposed agreement to sell M-CARE will go to the Regents for consideration at the Sept. 22 Regents meeting.

The sale will also require approval from government regulators, a process that could take several months or even longer. We anticipate that the government approval process could be completed by late 2006 or early 2007.

I know there will be many questions and I acknowledge that I won’t be able to answer all of them immediately because the details are simply not yet firm. What I promise is that I will share updates as fully and frequently as I can. To that end, I have laid out what I think are some questions you probably have, and answers to those:

Why now?
The Health System as a whole is in a position of strength from a financial and quality perspective and we must remain sharply focused on our critical missions. Pursuing this change now helps ensure we can continue educating tomorrow’s health care professionals and scientists, conducting groundbreaking research and providing exceptional care to patients in Michigan and beyond.

Some of you may wonder why we are moving in this direction now. We recognize that the national climate for the health insurance industry is changing rapidly. The landscape is different from even a year or two ago. One major change, for example, is the rapid growth of consumer-driven health care plans; another is emerging technology that may require significant capital investments. As a result, we and many other health plan owners are pursuing opportunities we may not have considered in the past.

Under the expert leadership of Executive Director and CEO Zelda Geyer-Sylvia, our M-CARE team has made M-CARE an exceptionally high-quality, well-regarded, and valuable health plan that makes it attractive to BCBSM and a good time to pursue a sale.

What does this mean to M-CARE members?
They will continue to receive high-quality health care coverage. There will be no lapse in coverage for M-CARE members. M-CARE products will remain in place after the sale, so all M-CARE members will continue to have their same plans through the length of their employer’s contract with M-CARE and renewals for 2007 coverage. For the University of Michigan’s employees, graduate students and retirees, and their covered dependents or survivors, existing M-CARE products will remain in place through 2007. For 2008, the University will work with the Blues to have a health plan intended to provide the same level of benefits and choice as the University’s current M-CARE offerings. There will be no lapse in coverage - I can’t emphasize that point enough.

What about health plans offered to the University beyond 2007?
I want to reassure you that we are committed to offering an excellent level of benefits, network of providers and hospitals, and service for our employees and their dependents, retirees and their survivors, and graduate students. We will continue to offer a benefits program designed by U-M to support our benefits strategy and the health care needs of the University community. This will help ensure we can continue to recruit and retain the finest faculty and staff. Again, there will be no lapse in coverage for our University community if a sale occurs.

What about our M-CARE co-workers?
I know you are concerned about your colleagues at M-CARE and what will happen to them if a sale takes place. I and other Health System leaders share your concern as well and we have a solid plan in place.

The more than 400 U-M employees who work for M-CARE, who were notified of the possible sale this morning, will be retained until the sale is final. Once the sale is final, many M-CARE employees will be retained by U-M under a lease agreement to provide services to Blue Care Network for a period of time through the transition. How many employees hasn’t been determined. After that time, we’ll assist employees in transitioning to positions at BCBSM, Blue Care Network, other areas of U-M or the community. We will apply the U-M Reduction in Force policy and the federal Worker Adjustment and Retraining Notification Act, which provides for at least 60 days’ notice, with 90 days’ notice for employees with 10 or more years of service.

As events unfold toward the sale date, the M-CARE administration, UMHS human resources staff and BCBSM will work together to provide more specific information about employee positions and transitions. We know that any transition of this magnitude causes concern, but we pledge to work to make it as smooth as possible for all involved.

Why Blue Cross Blue Shield of Michigan?
Part of our reason for deciding to pursue a sale is because we believe BCBSM is a good choice. Its non-profit mission and focus on improving the quality of health care while streamlining health care administrative processes puts BCBSM in sync with our own efforts. We share a common goal of improving the health of Michigan’s citizens.

The discussions with BCBSM also include entering into an exciting joint venture to improve health care delivery and public health in our state. BCBSM’s long-standing cooperation with our health-services researchers has resulted in a number of successes in the improvement of the health status of our citizens. Part of the appeal of this opportunity is an expansion of that work together.

Finally, we think aligning with a local company will make it easy for members to transition their health care coverage, since the BCBSM provider network includes nearly every M-CARE provider.

I realize this is a lot of information to sort through and that you will have more questions. I and others will provide updates through e-mail and, later today you can access information on a Web site we’ve developed. We also will have an online form available so that you may pose questions and we’ll do our best to respond fully.

Sincerely,
Bob Kelch

UMHS News release

Background on M-CARE