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Mid Atlantic Medical Svcs (MME) Message Board

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  • matollionequay matollionequay Sep 12, 2003 8:13 AM Flag

    Treatment of Sales People

    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.