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Some Blue Cross Blue Shield nonprofit organization organizations ar considering either merging or converting to for-profit condition to avail them vie with larger insurers in an "increasingly concentrated managed-care industry," the Wall Street Journal reports. These companies, as well as smaller health insurers, "are finding it harder to vie against larger players for many reasons, including the need for economies of scale and greater investments in expensive technologies and tools to comply with laws" or serve members in consumer-directed health plans, according to the Journal.
New Jersey's Horizon BCBS recently filed an application to become a for-profit company, and other not-for-profit BCBS plans are expected to do the like in the next few years, according to University of the Sciences in Philadelphia health policy professor Robert Field. In add-on, the deuce largest nonprofit BCBS plans in Pennsylvania, Highmark and Independence BCBS, are seeking approval for a proposed merger. The merger does not include a for-profit conversion, just critics expect the companies to seek the condition change eventually.
WellPoint, the parent company of the nation's 14 for-profit BCBS plans, is considered a likely purchaser of the plans that convince, the Journal reports. "Very clearly, this industry is going to continue to undergo integration," WellPoint interpreter Michael Kleinman said, adding, "It's tough for smaller plans to be able to produce the investments to keep up with" services offered by bigger insures, such as WellPoint's cost and quality comparison data on providers in several geographical areas.
Field said "well-nigh of the low-hanging fruit" among independent BCBS plans was acquired by larger firms in the 1990s and other 2000s, adding, "I think pressure continues on those that didn't merge at that point." Field aforementioned he expects "that there will be some more than of those that bear remained independent merging or getting swallowed up in one path or another." He celebrated that Humana also is a likely purchaser of BCBS plans that might convert to for-profit status (Wisenberg Brin, Wall Street Journal, 8/25).
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