Trigon Healthcare's aggressive plans to expand throughout the Southeast have not been met warmly by some of its potential targets.
Richmond, Va.-based Trigon owns and operates the state's Blue Cross and Blue Shield plan, which completed its conversion to a public company in February. Trigon has 1.9 million enrollees in its various health plans and reported $1.8 billion in revenues in 1996.
At the company's annual meeting last week, its chairman and chief executive officer, Norwood Davis, said Trigon plans to expand in Virginia and then into Georgia, Maryland, North Carolina, South Carolina and Tennessee. The company said it will look at acquiring other Blues plans, insurance companies and providers of ancillary services, such as home care.
Norwood said he expects Trigon to play an active role in the Blues consolidation sweeping the country. He said Trigon is well-positioned as the only publicly traded Blues plan in its target market and that Blues plans might prefer a deal with Trigon because they could lose their national license if they sold to a non-Blues buyer.
"The company is in the same strong, statewide position the North Carolina banks enjoyed a decade ago, before they came to dominate regional banking," he said in a press release.
But before Trigon can become the NationsBank of Southern healthcare, it has some serious courtship to attend to.
Bill Bennington, director of public relations for Blue Cross and Blue Shield of North Carolina, doused the notion of any deals with Trigon.
"The company is not for sale," he said. "We are a healthy organization with strong reserves. We are a leader in the marketplace and are the fastest growing managed-care company in North Carolina. Why in the world would we want to sell to anybody?"
He further noted that the North Carolina Blues is not-for-profit and has no plans to go public. "Trigon can't just make a tender offer and come in and buy us," he said.
Bennington said the North Carolina Blues earned $17.8 million on about $1.6 billion in revenues and had reserves of $530 million in 1996. Given the company's healthy finances, he said, "It's not like there's a lot of reason why there would be any inclination to sell."
Blue Cross and Blue Shield of South Carolina also has not laid out the welcome mat for Trigon. Donna Thorne, director of corporate communications for the South Carolina Blues, said the not-for-profit plan is not interested in converting to a public company. She said the plan earned $34.6 million on total revenues of $405 million and had $192 million in reserves in 1996.
"We are well aware that Trigon wishes to join with other Blues plans, and we wish them well," Thorne said. "But for the moment we are perfectly happy and very successful with our independent status."