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Eastern Blues plan may turn for-profit

Doctors are worried that CareFirst's potential conversion from a nonprofit plan may lead to pay cuts and a new corporate parent.

By Cheryl Jackson, amednews staff. June 11, 2001.

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The potential for the latest Blues plan to sprint toward for-profit conversion has doctors fretting in Maryland.

They fear repercussions if CareFirst BlueCross BlueShield proceeds with converting from nonprofit status. CareFirst is the largest private insurer in Maryland. Its 3 million members also include people in Delaware, Virginia and the District of Columbia.

CareFirst officials have been tight-lipped about such plans. Converting became easier for Owings Mills, Md.-based CareFirst when state lawmakers dropped a requirement in April that CareFirst members vote on any conversion plan.

Even though officials expect it could take two years for CareFirst to convert to for-profit status, doctors are already wondering what such a move would mean for them.

"When you put stockholders in the equation, they have to be fed. Where's the revenue going to come from?" said Mike Preston, executive director of MedChi, the Maryland State Medical Society. "We suspect they're going to try to do it by putting a further squeeze on doctors and other providers. We think that's a legitimate concern, in addition to just the general principle about why this community asset needs to be converted into private hands. It's not at all clear to us about why this ought to happen."

It's happening across the country.

The past decade has seen Blues plans lose market dominance to publicly traded national managed care plans that have the money to improve technology, develop new products and buy more companies.

To stay competitive, the Blues need to restructure and consolidate, said a recent study by Conning & Co. [...]