Blues in North Carolina, Western states agree to hybrid merger
Blue Cross Blue Shield of North Carolina and Cambia Health Solutions, the parent of Regence Blues plans in Washington, Oregon, Idaho and Utah, are joining forces to combine corporate and other back-end services under the Cambia name.
The big picture: Transactions among Blue Cross Blue Shield plans have been rare. But this deal is another version of health insurance companies teaming up to diversify outside of their traditional insurance business, lower administrative costs, and possibly increase bargaining power over hospitals and doctors.
Details: Cambia and BCBS of North Carolina are calling the deal an "affiliation," not a merger.
- Both insurers will "maintain separate assets, capital and revenues" as well as their existing names, the companies said in a fact sheet. BCBS of North Carolina has about $10 billion in annual revenue, and Cambia has about $6 billion, according to the Wall Street Journal.
- The companies also will continue to handle their own contracts with hospitals and doctors.
- Patrick Conway, the head of the North Carolina Blues and a former Medicare official, will be the CEO of the combined entity.
Flashback: In 2016, Cambia CEO Mark Ganz, who will be executive board chair of this new entity, told me health insurers couldn't rely on their old business models: "The health plan of today is going to be the health solutions company of tomorrow. It's going to be something different."