BLUE SHIELD: Rare Conversion Reversal For New Acquisition
In an "unusual reversal" being billed as a "first-ever," Blue Shield of California is converting its newly acquired CareAmerica Health Plans from for-profit to nonprofit status, Modern Healthcare reports. Blue Shield recently received state regulatory approval to merge CareAmerica into its HMO and PPO plans. Blue Shield officials said the decision to convert the plan was in keeping with the insurers' history as a not-for-profit. Wayne Moon, Blue Shield CEO, said, "We're a not-for-profit, and we believe in that. We believe there's something we can do in the marketplace that's unique." In addition, "on a pragmatic level, Blue Shield had to convert CareAmerica" to a nonprofit so it could be integrated with its existing Access+ HMO. "Otherwise the company wouldn't be able to achieve the economies of scale that prompted the $195 million acquisition in the first place," Modern Healthcare reports. In a "straw poll" conducted by Blue Cross, Modern Healthcare reports there was "no previous examples of an HMO that had switched to a not-for-profit structure" (Rauber, 7/13 issue).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.