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Blue Cross and Blue Shield Plans Continue Growth Via Mergers

MANAGED CARE June 1996. © MediMedia USA
News and Commentary

Blue Cross and Blue Shield Plans Continue Growth Via Mergers

MANAGED CARE June 1996. ©1996 Stezzi Communications

Once a sleepy system of indemnity insurers, the Blue Cross and Blue Shield network has awakened with the fervor of competition as its 63 plans strike deals with one another to gain muscle in the health care market.During May, three mergers made headlines. On May 3, Blue Cross of Northeastern Pennsylvania and Capital Blue Cross of Harrisburg revealed their plans to join forces. Nineteen days later, Blue Cross and Blue Shield plans in New Jersey and Delaware said they would merge. Ten more days and the New Jersey plan, not even close to completing its Delaware deal, said it would combine with Anthem Blue Cross and Blue Shield of Indiana to create a company with $7.8 billion annual income — Anthem's $6.1 billion, New Jersey's $1.3 billion and Delaware's $414 million.

"The rule of thumb today is that you need at least a million members to be competitive," said Robert Cole Jr., president and CEO of BCBS of Delaware. "Since there are only about 717,000 people in Delaware, it becomes impossible to achieve the scale required — even if we had one hundred percent of the market."

Being credentialed for the fifth or fifteenth time is a pain for physicians, and until the managed care industry standardizes the process it will continue to be dreaded. Offering some relief, so far only on a regional basis, is a working coalition of California associations representing physicians, medical groups and HMOs that has developed a credential form to replace redundant applications. It will be used throughout the state.

The form contains a core of questions for physicians about education, licensure, training and disciplinary and malpractice records. "In terms of hassle factors, having to fill out the same information over and over has probably been the number one issue among doctors," says John Lewin, M.D., CEO of the California Medical Association. "We're extremely pleased to have taken the lead in eliminating it."

Independently, Equifax, a major collector of personal credit and insurance data, has created an on-line system that will allow HMOs to get immediate verification of physician credentials. The Atlanta-based company says it has 600,000 doctors in its database. All the credentialing information, says Equifax, comes from primary sources.

Churning out five or six sets of clinical practice guidelines a year will not be the mission of the Agency for Health Care Policy and Research anymore. Agency Administrator Clifton Gaus, Sc.D., has been speaking with public and private groups for the past year and their message, he says, has been very clear: "They're seeking the scientific foundation from which they can develop their own high-quality, evidence-based guidelines."

To create this "scientific foundation," the six-year-old organization will work with states and groups such as HMOs and provider organizations to give them the tools to build guidelines that are better suited for their needs.

The agency will keep a national guideline database, contribute research and evaluation services and develop centers for evidence-based practice that will provide literature reviews, decision analyses and meta-analyses on topics of national interest.

Three sets of AHCPR guidelines are still in the works: colorectal cancer screening, chronic headache pain and Alzheimer's disease screening. Agency officials don't know when they will be released.