New York's five Blue Cross and Blue Shield plans have created a for-profit subsidiary to jointly market managed-care products to employers across the state.
With the state insurance department's approval, the five plans have begun offering an HMO and a point-of-service product under the name Blue Care New York. The plans have created one of the largest statewide health networks in the country, comprising 23,000 healthcare providers.
The new subsidiary echoes a venture of New England's Blues plans, which aligned last year to sell a consistent line of managed-care insurance coverage to regional employers (June 19, 1995, p. 26).
Blue Care New York's products are designed to respond to the needs of employers who have workers in more than one region of the state. Each covers the same benefits, whether care is delivered in Albany, Rochester or New York City. Employers will receive one bill for the premium, so there's "much less administrative hassle," said Frank Amaro, Blue Care New York's chief executive officer.
Until the creation of Blue Care, insurers licensed to offer products statewide had an edge over individual Blues plans, whose marketing of insurance products is limited to their respective regions. Blue Care gives them the ability to offer a single product to multiregion employers.
"It gives us a vehicle to effectively compete statewide," said Deborah Bohren, director of media relations for Empire Blue Cross and Blue Shield, one of the participating plans.
The other participants are Blue Cross and Blue Shield of Utica/Watertown; Blue Cross and Blue Shield of Central New York; Blue Cross and Blue Shield of the Rochester Area; and Blue Cross and Blue Shield of Western New York and its Blue Shield of Northeastern New York division. Together, they insure more than 7 million customers.
Initially, Albany-based Blue Care will offer an HMO through independent contracts with private practice physicians and a point-of-service option enabling customers to seek treatment from providers outside the network. Blue Care will market and administer the products, while the state's Blues plans will provide medical management, utilization review and other membership services.
Blue Care currently doesn't have the capability to provide third-party administrative services on behalf of self-insured employers, Amaro said. The target market is businesses with 250 or more employees who require statewide or multiregion managed-care coverage.
For out-of-state care, customers automatically will be enrolled as members of the Blue Cross and Blue Shield Association's national HMO network, called HMO Blue USA.
Amaro said the five participating plans have invested equally in the for-profit subsidiary but declined to reveal the amount of capital committed to the project. He said each plan will be represented on Blue Care's board and any profits will be divided equally among them.
Before joining Blue Care, Amaro was director of sales and marketing for Kaiser Permanente's North Carolina region.