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Mid Atlantic Medical Svcs (MME) Message Board

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  • matollionequay matollionequay Sep 3, 2003 5:18 PM Flag

    Treatment of Sales People

    You don't know what you are talking about. Large law firms are experience rated meaning their premiums are set to their experience. They have the money to pay. If you keep them happy they stay with you and you make money.

    I have had them as clients at 2 different plans
    and they are good business. Further, when you get one and do well, another firm hears about it and you get a shot at their business.

    Of the top 25 firms, the leading player is probably Wellpoint. They bought Mass Mutual which used NCPPO (MM was the principal owner).
    NCPPO had all the big firms including the consortium.

    Total premium for law firms with over 250 employees in DC would be well over 100 million.

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    • And NCPPO has lost money for WellPoint since the day they bought it. WellPoint has trimmed that business by almost 50% since they purchased it to get rid of large money losing accounts. Read interviews with Schaeffer - he admits that WellPoint made some mistakes with that acquisition and he learned a lot from it.

      Your comment was spoken like a true salesman. Who cares how much in premium you collect from an account - that is short sighted and what got investors in trouble with Tech stocks. Revenue is meaningless - U/W gain is the only thing that matters. And the truth of the matter is that lawyers consume a great deal of care and are a higher risk of catastrophic claims (heart failure, etc.) Experience rating is all well and good but when the healthy members of the pool choose to "self-insure" you are left with the bad end of the experience without an offsetting healthy pool gains turn quickly to large losses.

      • 1 Reply to john_harkes_6
      • NCPPO is a network only. It is similar to Alliance. It is not involved in risk taking. Those carriers/tpas/employer groups that rent NCPPO are the risk takers. Wellpoint didn't even know they bought into NCPPO at the time they purchased Mass Mutual's Health Business. They purchased MM's entire national book of business and healthcare ops for about $350 million (best of my recollection). Included in the balance sheet was about 200 million of grade A corporate bonds. MM was making about 50 million a year from its healthcare operation. They attributed approx 10 million of that to the business utilizing NCPPO. Getting MMs book for 150 million net was a steal. However, WLP's management team alienated everyone, disregarded the local sales team, bought out NCPPO management including a start-up HMO, and replaced the local mgmt team with no-nothings who took a very profitable high margin no-risk jewel into the toilet. So if your knowledge of NCPPO leads you to believe it is a poor model you need to understand when in its history you are making the judgement. Schaeffer's comments about learning have to do with how horrible a job his friend Mark Weinberg did when he took over the non-California/non-Blue Cross Wellpoint business. Weinberg tried to extend the market dominating bully tactics that worked in California in the individual/small group business. It didn't work. They brought him back to Cali where he sold at least 10 million of his WLP stock.

        With regard to law firms and other white collar firms that utilize NCPPO, they offered MM very good underwriting gain. Your concept of mass self-insuring at law firms just isn't grounded in fact. MM made money on law firms; Mamsi can too.