Blue Cross and Blue Shield of Massachusetts has announced it will split into three companies to become more competitive.
The Boston-based Blues will form a holding company with three legally and financially distinct entities under it: one operating the managed-care business, one focused on group indemnity insurance and one for individual indemnity business.
The current structure dates back to when the company was virtually the only health insurer in Massachusetts and offered only indemnity plans, said William Van Faasen, its chief executive officer.
"This situation holds us back as a business and leads to some confusion about our company's role and status in the marketplace," he said. The company reported a net loss of $70 million for 1996 and last month said it was quitting as a Medicare fiscal intermediary (Feb. 3, p. 49).