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Western, Midwest Blues giants drop alliance plans, stay open to other deals

Regence, Health Care Service Corp. decide they're not a good match.

By Cheryl Jackson, amednews staff. Sept. 3, 2001.

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The Regence Group and Health Care Service Corp., both owners of Blue Cross Blue Shield plans, have called off their alliance.

The companies would have shared a board and management based at HCSC's Chicago headquarters. The companies nixed the deal Aug. 15.

Although assets would have remained separate, it would have created the largest nonprofit health plan in the country and the fourth largest payer overall.

The plans had wanted to save money by buying and providing services or supplies together.

"We want to preserve the not-for-profit option in health care and are open to discussion with other Blues plans," HCSC spokesman Tony Rau said. "This arrangement or affiliation wasn't going to work the way the organizations had hoped."

The 3 million-member Regence Group, based in Portland, Ore., includes plans in Oregon, Washington, Utah and Idaho. Chicago-based HCSC has about 7.4 million members in Illinois, Texas and New Mexico.

Other than to point out some differences in membership and claims processing needed for the groups, officials from both sides are not saying much about why the deal fell through.

Most Regence Group customers are small- to mid-size employers, while HCSC caters to larger, national groups. The plans had hoped to share a common claims and membership system, but Regence and HCSC found they required different processing systems.

"We discovered that HCSC would be more efficient by using their current system and we would be more efficient by using a new system we're launching throughout our four plans," said Regence Group spokeswoman Cynthia Platonov. [...]