Health leaders to AG James: HealthNow/Highmark deal 'will shortchange New Yorkers on charitable funds'

A group of six philanthropic organizations serving Western New York recently sent the following letter to New York State Attorney General Letitia James to express their dissatisfaction with the proposed charitable requirements of the affiliation of HealthNow New York – the largest health plan in Western New York – and Highmark, a health care company headquartered in Pennsylvania.

Leadership from the Health Foundation for Western and Central New York, the Cullen Foundation, the John R. Oishei Foundation, the Gebbie Foundation, the First Niagara Foundation and the Greater Rochester Health Foundation sent the following letter to James:

Dear Attorney General James:

We, leaders of philanthropic organizations serving the western New York community, write today with deep concern on the affiliation of HealthNow New York—the largest health plan in Western New York—and Highmark, an out of state company headquartered in Pennsylvania. The proposed charitable contributions resulting from this merger as recommended by the New York State Department of Financial Services—$10 million over five years—are woefully inadequate, especially when considered against the vast, urgent health needs of our community.

We ask that your office demand that a far more appropriate amount of charitable funds be required as a condition of this transaction. This decision could have a significant impact—for better or worse—on our ability to meet the health needs of underserved populations in our region.

The $2 million a year outlined in the Department of Financial Services approval for both Northern and Western New York would deeply shortchange New Yorkers at a time when we need the investment in health care the most.

Recent Highmark-Blue Cross Blue Shield mergers across the country resulted in significantly more charitable assets in almost every case. Notably in 2015, Highmark acquired Blue Cross of Northeast Pennsylvania and the acquired party gave $90 million to a charity in North East Pennsylvania to support health and wellness effort.

In New York State, mergers have also created significantly more charitable assets in almost every instance. Of note, most recently, Fidelis’s takeover by Centene created $3.5 billion in charitable assets to create the Mother Cabrini Foundation.

Other examples include:

•In 2002, Univera Healthcare was acquired by Excellus creating $100 million in charitable assets which formed the Health Foundation of Western and Central New York;

•In 2006, the acquisition of Empire Blue Cross by Wellpoint resulted in $250 million being committed to form the New York State Health Foundation

•Also in 2006, MVP was acquired by Preferred Care generating $232 million in charitable assets forming the Greater Rochester Health Foundation

As you can see, these acquisitions generated ten to more than twenty times more charitable assets for New York State than the commitments made by Highmark in the recently approved affiliation. In other mergers or affiliations, Highmark itself has committed nine times the assets it committed in New York State. Put simply, the current commitment secured by the Department of Financial Services will leave New York State consumers significantly disadvantaged.

The COVID-19 pandemic has highlighted and exacerbated the existing health disparities that exist in our communities. During this unprecedented public health crisis, we need to devote as many assets as possible to the health and wellbeing of our most vulnerable constituents.

We ask you to postpone the final approval of this transaction and demand these health plans contribute a more appropriate amount to improve the health of the communities we serve.

Sincerely,

Nora OBrien-Suric, PhD, President, Heath Foundation for Western and Central New York

Robert D. Gioia, President, The John R. Oishei Foundation

Gregory J. Edwards, CEO, Gebbie Foundation

Florine Luhr, President, The Cullen Foundation

Elizabeth Gurney, Executive Director, First Niagara Foundation

Matthew Kuhlenbeck, President and Chief Executive Officer, Greater Rochester Health Foundation