Business groups in two areas of New York state are establishing health insurance purchasing alliances.
The Long Island Association, which represents local businesses, is sponsoring a healthcare purchasing cooperative that will make group health insurance available to more than 67,000 businesses with fewer than 50 employees beginning this summer. More than 800,000 people will be eligible for coverage through the Long Island Association Health Alliance.
Last month, the alliance announced contracts with Avon, Conn.-based Value Health Management, which will provide healthcare information and management services, and Health Benefits America, a Salt Lake City-based provider of administrative services. Terms of the contracts weren't disclosed.
Meanwhile, the County Chamber of Commerce in White Plains, N.Y., has teamed up with the Rockland Business Association and the Putnam Alliance to make health insurance available to employers and individuals in a three-county region.
The Westchester/Rockland/Putnam Health Plan Purchasing Alliance has outlined an ambitious plan to design cost-effective health plans that will take bids from all commercial and not-for-profit insurance carriers, HMOs and other health plans. The County Chamber of Commerce is financing the initial start-up costs, estimated at $50,000 to $60,000.
The target start-up date is Jan. 1, 1995. Harold E. Vogt, the county chamber's president and chief executive officer, estimates the alliance will make insurance available to 100,000 people in the first year. Through the power of cooperative purchasing and other administrative savings, the alliance believes it can save more than 8 cents on every premium dollar spent. However, it has yet to determine what the average premium will be.
Arthur E. Weintraub, president of the Northern Metropolitan Hospital Association, said the issue of geographic boundaries needs to be looked at further. "We need to examine the pros and cons of maintaining three counties as a viable unit or linking it to a broader region that's evolved over decades." He said many providers have defined their market area more broadly, covering the entire Hudson River Valley.