Blue Cross Hires Communications Firm-firm specializes in managing public relations problems

PROVIDENCE -- Blue Cross & Blue Shield of Rhode Island has hired a Boston consulting firm that specializes in managing public relations problems, following a week of intense criticism over perks the health insurance giant has given its executives.

Blue Cross has hired Nicolazzo & Associates, a "strategic communications management" firm that has represented General Motors, Philip Morris, Ernst & Young, the Pharmaceutical Research and Manufacturers of America and the Industrial Development Board for Northern Ireland, The Providence Journal reported.

According to its Web site, one of Nicolazzo & Associates' specialties is "crisis communications." Joseph Grillo, a senior vice president at Nicolazzo & Associates who is advising Blue Cross, declined comment.

On its Web site, Nicolazzo & Associates says: "In today's intense media environment, an unexpected event can immediately put a business in full crisis. ... We believe that every crisis is manageable. When a negative event happens, an institution needs to work with outside counsel on a strategic communications plan that will mitigate damage, manage the crisis and assist with remedial action."

The loan to Ronald Battista helped pay for his 2001 divorce and helped him build a $700,000 house in Warwick Neck, near Narragansett Bay, for his new wife, who is his secretary at Blue Cross.

Since the loan was revealed, legislators have criticized Blue Cross at Statehouse hearings to consider a raft of legislation aimed at imposing stricter regulations on Rhode Island's dominant health insurer.

At one hearing, a Blue Cross executive blamed high rates on the poor health of many of the company's subscribers. During the same hearing, one lawmaker said many Rhode Islanders have lost confidence in Blue Cross.

On Thursday, Gov. Don Carcieri criticized the Battista loan and the Blue Cross board of directors and questioned whether state regulators could have done more to police the company that insures more than 600,000 people.

Blue Cross spokesman Scott Fraser confirmed the company has hired Nicolazzo & Associates, but declined to say how much the firm is being paid or to discuss what the firm is doing.

Blue Cross is planning a series of initiatives in the coming weeks to address recent public concerns, Fraser said, though he declined to elaborate.

The hiring followed calls by public figures including the governor and attorney general for tighter restrictions on the nonprofit health care company, whose board recently forgave a $600,000 loan to its president. The loan to Ronald Battista helped pay for his 2001 divorce and helped him build a $700,000 house in Warwick Neck, near Narragansett Bay, for his new wife, who is his secretary at Blue Cross
That's a good way to keep health costs down Blue Cross. I hope they're replaced by another company who is more ethical.

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Battista is just trying to put the "profit" in non-profit. It's time to loosen up the restrictions on how you can write health insurance and let the market break up the monopoly the Blues enjoy. That's the only way we are going to get meaningful reductions in the cost of healthcare.

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