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Old 03-13-2019, 11:45 AM
act2106 act2106 is offline
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Default Cambia and BCBS of NC

Cambia and BCBS of NC seem to be kind of combining, kind of not.

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Cambia Health Solutions, operator of the Regence BlueCross health insurance operation in Oregon and three other states, is affiliating with a slightly larger health plan in North Carolina.

Cambia and Blue Cross and Blue Shield of North Carolina will combine their boards of directors and certain management and administration functions but will remain separate not-for-profits. No money changed hands. The new entity will be called Cambia Health Solutions.


Dr. Patrick Conway, president and CEO of the North Carolina operation, will serve as CEO of the affiliated companies. Mark Ganz, Cambia chief executive, will be the new executive chair of Cambia’s board of directors.

It’s been a rough couple years for the health insurance industry. Between the launch of the Affordable Care Act and skyrocketing healthcare and pharmaceutical costs, some have struggled to survive. It’s been no picnic for customers either. They face enormous premiums and so-called “junk” policies with enormous deductibles and co-pays.

Cambia’s insurance arms for the most part weathered the ACA storm with seeming ease. Nevertheless, the status quo is no longer acceptable, Ganz and Conway said, as consumers demand change.

Conway rose to prominence in national health insurance circles when he served in senior roles at the Centers for Medicare and Medicaid Services between 2011-2017. “We are convinced that this (affiliation) will enable us to deliver a better, simpler, more affordable health system,” he said. “We have to innovate because our customers are demanding it.”

Added Ganz: “Americans are waiting for a break-out play. Patrick and I and our boards are convinced that we can bring more scale to the innovation that is required to transform the way health care is enjoyed by Americans.”

The two companies began exploring an affiliation about a year ago, Ganz said. They had already partnered in Echo Health Ventures, a healthcare-focused investment firm.

Cambia has 2.6 million members in Oregon, Washington, Idaho, and Utah. It boasts annual gross revenue of $9.5 billion. Its North Carolina counterpart has 3.8 million members and gross revenue of $15.2 billion a year.

Cambia has approximately 4,620 employees compared to 4,730 at Blue Cross Blue Shield of North Carolina.

After the affiliation is complete, the companies will maintain their headquarters in Portland and Durham, N.C. The companies anticipate sharing management, administrative, operation and other corporate services. It’s too soon to determine whether that will require certain employees to relocate or will lead to job cuts, company officials said.
https://www.oregonlive.com/business/...ry-merger.html

I'm curious how this will affect the actuaries in these companies. Maybe it's too early to know.
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Old 03-13-2019, 12:03 PM
Dr T Non-Fan Dr T Non-Fan is offline
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Shouldn't affect the actuaries.

Will likely affect employees in the membership and claims systems, as they will likely move operations to one or the other. Cut maybe half the employees in one of those current areas.

Usually affects management levels more than anything. Plenty of redundancies there. Managers with three or four direct reports get six or seven direct reports, dumping another manager in the process. And on up the line.
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Old 03-13-2019, 12:29 PM
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If this sort of thing needs regulatory approval, then it will probably be a year or more before anything actually happens.

Does anyone understand the difference between this and a full on merger? It sounds like both companies will have the same leadership, so I don't understand how this isn't a merger.
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Old 03-13-2019, 12:38 PM
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Originally Posted by BruteForce View Post
If this sort of thing needs regulatory approval, then it will probably be a year or more before anything actually happens.

Does anyone understand the difference between this and a full on merger? It sounds like both companies will have the same leadership, so I don't understand how this isn't a merger.
Just words, and words are wind. They say "not a merger" to people who are concerned that it is a merger. Mainly, the states in question don't want their citizens' jobs to go away.
"Everything will operate the same way as before," they say now, though six months afterward, there will be one operating system for both companies. That's where the real savings comes from. And admin savings, when ACA requires a minimum 80% loss ratio, is important to keep the companies in business (AKA, non-profits making "profits").
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Old 03-13-2019, 12:41 PM
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Aside: since when does the "80/20 Rule of Insurance" mean anything about loss ratios? (I guess since ACA.) I was looking up the ACA loss ratio and this "rule" came up.

It used to mean that 80% of claims costs were borne by 20% of the membership.

OK, way off topic:
https://www.briantracy.com/blog/pers...eto-principle/
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Old 03-13-2019, 12:43 PM
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Right, Pareto Principle.
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Old 03-13-2019, 04:09 PM
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So... they're not merging, or being acquired... but they're going to become a part of Cambia Health Solutions.. .which is a holding company anyway. Sounds mostly like they're trying to sidestep any complaints about consolidation.
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Old 03-13-2019, 05:06 PM
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True, but ACA practically forces consolidation of these "smaller" Blues in order to lower admin costs as a percentage of premium.
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Old 03-13-2019, 05:10 PM
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I worked for Regence BlueShield for 3 years in the late 90s
Customer service, correspondence and quality control.

That is all I have to add
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Old 03-14-2019, 07:42 AM
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Originally Posted by Dr T Non-Fan View Post
Shouldn't affect the actuaries.

Will likely affect employees in the membership and claims systems, as they will likely move operations to one or the other. Cut maybe half the employees in one of those current areas.

Usually affects management levels more than anything. Plenty of redundancies there. Managers with three or four direct reports get six or seven direct reports, dumping another manager in the process. And on up the line.
I don't know how these usually work, but it seems like there could be consolidation among actuaries, along with the other areas you mentioned. But maybe not.

Today the actuarial directory shows:
10 actuaries for Cambia (including Portland and Seattle)
5 actuaries for Regence (including Portland and Seattle)
11 actuaries for "Blue Cross Blue Shield of North Carolina" or "Blue Cross/Blue Shield of NC"

I know the directory doesn't include everyone but I think it will still be interesting to see if it changes much in the next while (maybe 6-18 months?).
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