In its latest move to win support to become a publicly traded company, Empire Blue Cross and Blue Shield says it will create a $1 billion charitable foundation if it is allowed to restructure itself as a for-profit entity, the New York Times reports. The announcement, based on estimates of future stock prices, more than doubles the size of the foundation as projected by Empire in earlier statements.
Empire CEO Michael A. Stocker, M.D., told the Times that his organization's "continued viability" would be jeopardized and its potential for public health service dissipated unless the company was allowed to restructure itself as a for-profit company owned by investors. Empire says the foundation it would create could deliver health care to 100,000 uninsured children or buy prescription drugs for 50,000 low-income elderly people.
The heads of the insurance committees in the New York State Legislature, State Senator James L. Seward and Assemblyman Alexander B. Grannis, welcomed Empire's announcement. "The possibility of having $1 billion of new investment in our health-care system," said Seward, "is something that should not be dismissed lightly."
The conversion, which requires the approval of New York State lawmakers, has prompted opposition from a range of critics, including the Greater New York Hospital Association and the New York State Council of the service employees union.
"The benefits of the foundation pale in comparison to the havoc wreaked on the provider community by an investor-owned entity that does not care about providers but instead cares about stock prices on Wall Street," said Kenneth E. Raske, president of the Greater New York Hospital Association.
While most of the forty-nine Blue Cross associations in the U.S. remain nonprofit, plans in at least nine states have converted to for-profit status.