Newspaper article THE JOURNAL RECORD

Blue Cross-Blue Shield Offers Members a For-Profit Option

Newspaper article THE JOURNAL RECORD

Blue Cross-Blue Shield Offers Members a For-Profit Option

Article excerpt

CHICAGO (AP) _ The Blue Cross and Blue Shield Association plans to break its 60-year tradition of nonprofit health service to better compete in a changing national health care market.

The company will offer its regional members the choice of selling stock to the public and operating as profit-generating companies.

"There is a great deal of investment going on in the business; It's very dynamic," Susan Barrish, the association's vice president, said Thursday. "This includes developing new relationships, like Travelers and Met announced recently, and the consolidations of HMO businesses."

Travelers Corp., owned by shareholders, and Metropolitan Life Insurance Co., owned by policy holders, recently merged.

The change in Blue Cross' approach, announced Wednesday, would allow members to raise money from investors to compete with well-financed insurance companies and health management organizations, which are consolidating at an increasing rate.

So far only a few Blue Cross members are planning to give up their nonprofit status.

"We know there are a couple of plans that are looking at it with interest, and they might make the change next year," said Barrish, who declined to identify those members.

Virginia Blue Cross and Blue Shield is considering the switch.

"In health care reform driven by the Clinton reform package or the private sector, the rules of the market are changing," said Norwood H. Davis, Virginia's chairman. "Only those that are well-financed are going to be able to prosper. …

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