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Sparrow, Blue Cross make deal

Compromise is good through June, details still undisclosed

January 6, 2003

While some MSU professors and staff heaved a sigh of relief last week for the continuation of their health care at Sparrow Hospital, others are seeking alternatives for the future.

Sparrow Hospital and Blue Cross Blue Shield of Michigan reached a temporary agreement Tuesday.

The agreement will continue health coverage at Sparrow facilities for 67,000 Mid-Michigan residents while attempts are being made to come up with a long-term contract.

The deal was music to the ears of some MSU faculty covered by the insurance company, including physics and astronomy professor Norman Birge.

Although Birge and his family opt to use the MSU Clinical Center as their main Blue Cross health care provider, he said the agreement was a relief in case a family member needs emergency room attention.

But the temporary contract ends June 30.

Until a long-term deal is reached, coverage for the 5,800 Blue Cross-insured MSU employees and retirees in the tri-county area remains unclear.

"I hope that they get some mediation done," Birge said. "It's not obvious to me how they're going to do that."

The interim deal came after a three-year pact between the two companies expired Jan. 1.

Before the deadline, Sparrow demanded a 9.4-percent increase in payments from Blue Cross, claiming the insurance company's payments were inadequate.

Blue Cross had offered a 3-percent payment increase.

If both sides don't come to a long-term agreement by the six-month deadline there are two options, said Jon Ogar, a spokesman for Blue Cross.

"We could possibly have another extension," he said. "Or we could have a situation where we do not have a contract and the hospital wouldn't be recognized by Blue Cross."

A clause in the temporary deal prohibits either side from talking about the terms of the agreement.

But Ogar said he's confident a contract will be reached before further steps are necessary.

Sparrow, located at 1215 E. Michigan Ave. in Lansing, is one of the three largest employers in the Lansing area, along with the state of Michigan and General Motors.

Representatives from Sparrow also are anxious for a quick resolution.

"Our goal continues to be to attain a longer-term contract that guarantees access to Sparrow's quality, compassionate, cost-effective services for Blue Cross enrollees at a fair and equitable price," said Joseph Damore, Sparrow president and CEO in a written statement.

But animal science Professor Gretchen Hill said the decision won't affect her either way.

"I've used Sparrow in the past, and I already made a decision that I would go to Ingham Regional Medical Center," she said.

"Sparrow's not any more entitled to more money than anyone else is."

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