The Greater New York Hospital Association is assembling a team to develop a proposal for hospitals, doctors, unions and other healthcare community leaders to buy a majority stake in Empire Blue Cross and Blue Shield.
Interest by New York's healthcare community in taking over Empire was sparked by the New York-based insurer's proposed conversion to for-profit status, which requires state approval.
"It was an idea that was spawned after watching months of debate about the creation of a foundation (containing Empire's charitable assets) and no debate about the ongoing (insurance) enterprise," said Kenneth Raske, GNYHA president.
Although no plan has been submitted, Raske said he has briefed Empire President and Chief Executive Officer Michael Stocker about the group's proposed project.
As envisioned, no more than 5% of Empire's stock would be owned by any single healthcare organization. Yet, collectively, the group would hold a controlling interest. It also could involve private equity investors.
Raske would not speculate on a price "because it creates a market expectation."
For the year ended Dec. 31, 1996, Empire posted net income of $11.1 million on premium revenues of $3.4 billion. For the nine months ended Sept. 30, 1997, the plan reported net income of $17 million on premium revenues of $2.4 billion.