N.C. Blues considers for-profit status after plan acquisition

As they have in other Blues consolidations, physicians wonder what will happen when a major insurer decides to grow through the purchase of another plan.

By Cheryl Jackson, AMNews staff. July 9/16, 2001.

In a move that heightens physician concerns about industry consolidation, Blue Cross Blue Shield of North Carolina, a nonprofit operation, has bought the state's largest for-profit HMO.

With the June 19 purchase of Partners National Health Plans of North Carolina Inc., the Chapel Hill, N.C.-based Blues plan said it was considering converting to for-profit status, as have a rash of plans in recent years.

For example, Indianapolis-based Anthem Insurance Cos. Inc. filed with Indiana insurance regulators June 21 to become a stock insurance company. The plan needs the approval of the Indiana Dept. of Insurance and Anthem's members. Anthem owns Blues plans nationwide.

Blues are converting to get more money for improvement, including technological upgrades, needed to continue to compete.

"We're committed to doing what it takes to be competitive in the marketplace," said Michelle Vanstory, a spokeswoman for the North Carolina Blues. "We may choose to convert to a public company if we can secure the necessary agreements. It would make us a lot more nimble as a company in many situations."

The plan would have to be able to transfer stock to an independent health care foundation. The Blues plan has not yet made any formal application to state regulators to convert to for-profit status.

As a nonprofit, Vanstory said, the plan is limited in how much money it can use to buy for-profit operations.

The Partners acquisition, the details of which the Blues would not disclose, boosts North Carolina Blues membership by about 20%. Partners, of Winston-Salem, N.C., was owned by nonprofit Novant Health, which owns hospital systems in North Carolina. [...]