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By PAMELA C. TURFA pamt@leader.net
Friday, January 28, 2000 Page: 1A
WILKES-BARRE – Blue Cross of Northeastern Pennsylvania executives will
announce a restructuring plan next week that could reduce the company’s work
force.
How many positions could be affected has not been made public.
In response to persistent rumors that layoffs are imminent, President and
Chief Executive Offi cer Denise Cesare confirmed Thursday that a companywide
restructuring plan is being developed.
She did not rule out layoffs, saying it is too early to say how the plan
will affect employees.
She said rumors of a large-scale layoff of 300 employees – about one in
four workers – is not true, calling that number “significantly off. It’s
pretty far off.”
In an internal memo late Thursday to employees, Cesare said the company is
“focusing on operational efficiencies that will definitely involve some
internal restructuring.
“These operational efficiencies will impact positions within the
organization,” she wrote.
She also promised to announce details of the changes during an employee
meeting next week and asked employees to be patient while the company
addresses final details.
In a brief interview, she said the financial problems of First Priority
Health, the insurer’s managed-care plan, did not directly lead to the
restructuring.
In 1998, the First Priority plan lost $34.5 million, the largest premium
loss of any managed care plan in Pennsylvania. Through the third quarter of
1999, the plan lost $35 million.
Blue Cross has balanced the First Priority books using earnings from
company investments. And, it has tried to cut its losses by raising rates – 69
percent for seniors in Luzerne and Lackawanna counties and 10 percent for
other First Priority members.
“Certainly First Priority’s losses are not a good thing … but what we’re
doing is taking a look at the entire operation in terms of where we are in the
industry,” she said.
“I don’t want the employees to think that we’re in dire straits because of
this HMO thing,” she said.
The restructuring plan is more an outgrowth of a two-year effort to become
more efficient, she said.
And, a driving factor is improved technology that allows the company to
change the way it handles its work, she said.
Cesare promised an open discussion with employees and the public once the
restructuring plan is finalized and announced.
She declined to answer additional questions Thursday, saying she wanted to
announce details to employees before releasing them publicly.
Call Turfa at 829-7177.