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David Klein has been a transformative figure in area health care, local health care officials say.
The CEO of Excellus BlueCross BlueShield and its holding company parent, Lifetime Healthcare Cos. Inc., this week announced he would retire at the end of this year. The Blues plan to name a successor in April. It is widely expected to be Christopher Booth, Excellus president and chief operating officer.
"(Klein) has been a great collaborator," said Bradford Berk M.D., who as CEO of the University of Rochester Medical Center heads the region's largest provider organization.
Klein has gone far beyond the role of a claims payer to promote care quality and during his tenure as CEO helped heal a longstanding rift between URMC and Excellus, Berk said.
Nancy Adams, Monroe County Medical Society executive director, calls Klein a key figure in the dialing down of open hostilities between area private practice doctors and Excellus, a dominant third-party payer that at one time commanded some 90 percent of the local commercial health insurance market.Most of those doctors spent 10 years locked in a contentious court battle with Excellus over what doctors claimed were tens of millions of dollars in wrongly withheld fees.
Finger Lakes Health Systems Agency executive director Fran Weisberg, who heads a local health planning organization linked to the state Department of Health, called Klein an amazing health care leader, instrumental in promoting communitywide health planning.
In a 2009 interview, Klein described Excellus' role in local health care as going beyond that of a mere payer of claims to be "a front office for providers," linking patients to doctors and hospitals and advocating for quality, low cost and access to care.
Klein held the top post at Excellus for eight years. He previously spent 17 years as second in command to former Excellus CEO Howard Berman, a mentor who recruited Klein as a graduate student to work at the Blue Cross and Blue Shield Association in Chicago. Before coming to the Rochester Blues, Klein worked for the national Blues association and as a vice president of the Blue Cross and Blue Shield of Illinois.
Under Berman and Klein, Excellus grew from a Rochester-area organization with some 700,000 subscribers to the largest non-profit health insurance carrier in New York with more than 1.8 million enrollees. When Klein took Excellus' reins in 2003, the company had grown to a more than $4 billion company. In 2010, it posted revenues of $5.2 billion.
Much of the organization's growth came through mergers and acquisitions. Beginning in the late 1990s, Excellus-then known as Blue Cross Blue Shield of Rochester-absorbed Blues organizations in Syracuse, Watertown, Utica and Rome and acquired Univera, a non-Blues non-profit HMO in Erie County.
While Excellus' rapid expansion initially created some Rochester-area rumblings that local premium dollars were financing a Blues empire, Berman and Klein argued the Rochester Blues' growth was needed to create an organization large enough to withstand encroachment by for-profit insurance companies.
Their contention was bolstered after 2001. Blues organizations in 11 states were merged into the for-profit Anthem, which later merged with the publicly traded WellPoint Inc. In 2005, WellPoint also absorbed the parent company of New York's other large Blues organization, the New York City-based Empire Blue Cross and Blue Shield.
Lifetime Healthcare Cos. includes the area's largest non-profit home care provider, Lifetime Care, and Lifetime Health Medical Group, which runs the Rochester area's fifth-largest physician group practice. The practice group has seven local offices and a four-office Buffalo practice.
Lifetime Healthcare's for-profit subsidiaries include MedAmerica Inc., a national long-term care insurer, the EBS-RMSCO Inc. benefits consulting firm and Support Services Alliance Inc., an insurance group-purchasing agency for small businesses.
Taking the helm
Klein took over at the Blues at the tail end of a turbulent period. From the mid-1990s to the early 2000s, Excellus was often at serious odds with URMC, whose then CEO Jay Stein M.D. seldom saw eye-to-eye with Berman. The hostilities peaked in 2002 when UR-on its way to becoming the area's largest employer-dropped Excellus as a health insurance provider, striking a deal with Aetna Inc. to exclusively manage its new self-funded plan.
Not long after assuming CEO duties, Klein quietly started regular talks with Stein's successor, McCollister Evarts M.D., winning re-entry to the UR campus for the Blues.
Talks with Klein as well as with other Blues top managers continue.
"If you can recall, hostilities between us and Excellus used to be front-page news," Berk said. "It's a lot different now."
Excellus' flap with area private physicians began in 1999 when a doctors group sued the insurer, claiming Excellus had shorted its members on fees. The case continued for a decade, outlasting its first judge, before the Blues ultimately settled under Klein with no admission of wrongdoing. The ultimate payout to physicians, which included judgments awarded by the court as well as a final negotiated amount, totaled more than $50 million.
Testy at best while the court fight still brewed, area doctors' relations with the Blues have improved markedly since the settlement in no small measure because Klein has fostered a more physician-friendly environment, Adams said.
URMC's Berk concurred. Klein has worked with URMC and the medical society to address the area's doctor recruitment and retention problems, Berk said. A key development came several years ago, when Excellus agreed to cut its margins to lift physician reimbursements in a deal brokered in part by the Rochester Business Alliance Inc.
Adams acknowledged that Klein and Excellus have improved sensitivity to area physicians' widespread feeling that they are underpaid compared with other areas of the country, but she is less enthusiastic. Private practice doctors did not get as much of a boost in pay as URMC physicians, she believes.
"(The deal) went a long way toward addressing the problems, but there is still a way to go," she said.
There is a point on which all agree: Under Klein, Excellus-which still accounts for well more than half of the area's commercial-plan claims payments to doctors and hospitals-has greatly strengthened its role as a partner and collaborator.
Klein personally intervened to help arrange a budding collaboration between URMC's James P. Wilmot Cancer Center and the SUNY at Buffalo-affiliated Ros-well Park Cancer Center, said Wilmot center director Richard Fisher M.D.
Before they decided to explore an alliance last year, the facilities had been rivals that sometimes looked to poach patients from each other. While the denouement largely was seated in a longstanding personal friendship between Fisher and Roswell CEO Donald Trump M.D., Fisher said, Klein's intervention helped seal a deal.
Klein traces his determination to improve the local health care system in part to his experiences as the relative of a patient. In 2008 his wife, Linde, who died last year, was diagnosed with a late-stage rare cancer. She was treated at Roswell as well as the Wilmot cancer center.
His direct experience with a loved one's illness "changed the way I look at health care," Klein told the Rochester Business Journal in a 2009 interview. "Before, it was almost an intellectual exercise. When you live it, it's different."
In an opinion piece published prior to his wife's death last year, Klein wrote movingly of the lessons he drew from her illness.
"I believed my network of contacts would serve us well. I presumed there were unambiguous answers to questions about the best treatment plan and the best providers," he said. "What I learned was that for uncommon diseases like Linde's, if not all diseases generally, clear answers don't always exist. Indeed, I will never forget one doctor telling me that the information I sought was not available and that I would have to trust my gut! This is pretty incredible when you think about how much as a society we spend on health care."
Ultimately, Klein said, he offered his observations not to criticize, but "to challenge American medicine to be more integrative in care delivery, to be more explicit about medicine being an art, and to borrow from the spiritual and the softer sciences to improve the experience of the patient and caregiver."
In a wish echoing others contacted for this article, FLHSA's Weisberg expressed a hope that Klein's departure from the Blues would not signal his retreat from area health care but would rather see him continue in some other role.
"I have a lot of respect for him," she said. "He's been a critical force. I hope he stays around."
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