Blues plans merge to gain leverage


Highmark will become the Blue affiliate for BCNEPA’s 13-county service area.


Blue Cross of Northeastern Pennsylvania (BCNEPA) and Highmark have announced an intended merger between the two not-for-profit insurers. Highmark will become the Blue affiliate for BCNEPA’s 13-county service area.

“Commercial insurers are seeing a lot more competition than they ever have before,” says Jeff Hoffman, Senior Partner, Kurt Salmon Health Care Group, a global consultancy. “Big insurers that used to think they could rest on their market power are now being threatened as the healthcare model shifts to one based in value, not volume.”

And it’s not just other traditional health plans that insurers are competing against in the changing market.

“Smaller competitors that weren’t a threat before are partnering to offer risk-based products: Health systems are setting up exclusive partnerships with smaller insurers to create narrow networks and undercut huge competitors like the Blues as they work toward creating more cost-effective and outcome-driven clinically integrated networks,” Hoffman says. “It’s not just Pennsylvania. We’re seeing both smaller and larger insurance companies consolidating in Ohio, Georgia and other states, as well.

He says the Blues in Pennsylvania are trying to create market power so they can continue to manage how risk is distributed. Price negotiations likely will be impacted as the new combined plan gains more volume in the market. The two plans cover nearly 5 million members in 62 Pennsylvania counties as well as in Delaware and West Virginia. 

 “Pennsylvania currently has multiple providers,” Hoffman says. “But creating an insurance behemoth will stunt the ability of smaller insurers, hospitals and doctors to develop innovative new relationships and partnerships to better manage care delivery and lower the cost of care.”

Recent Videos
Related Content
© 2024 MJH Life Sciences

All rights reserved.