Opting not to do business with a for-profit out-of-state managed-care company, Central Maine Healthcare has sold its share of Central Maine Partners Health Plan to Anthem Blue Cross and Blue Shield for $1.8 million.
Central Maine Healthcare, a three-hospital not-for-profit system based in Lewiston, created the 10,000-enrollee HMO in 1997 through a 50-50 joint venture with Blue Cross and Blue Shield of Maine. At the time, the Blues plan also was a not-for-profit. The Blues plan converted to a for-profit in June after Indianapolis-based Anthem acquired it for $120 million.
The Blues' switch to for-profit status did not affect Central Maine Healthcare's decision to end the joint venture, said Peter Chalke, president and chief executive officer of Central Maine Medical Center, the system's flagship 106-bed acute-care facility. "We didn't know Anthem very well because they were a new entry into the market, but their tax status was not an issue for us."
Central Maine Healthcare went into the insurance business three years ago "to exercise maximum control over patient treatment," Chalke said.
Although the HMO turned a profit of about $88,000 in 1999 on revenue of $12 million, Central Maine Healthcare decided to "spend our dollars not on a managed-care firm but on patient care within our system," Chalke said.
Central Maine Healthcare last April considered buying the Blues' share of the HMO and running the operation itself while Anthem's acquisition of the Blues was pending. But the notion of taking full responsibility for the plan fizzled when the complexities of such a transaction became clear.
"Central Maine Partners Health Plan is so intertwined with the operation of Anthem that we are faced with what would be a start-up operation in order to be able to run (Central Maine Partners) as an independent company," Central Maine Healthcare's chief executive officer, William Young Jr., said in a written statement. "The costs and risks associated with starting a managed-care plan in Maine at this time are enormous."
Coverage of Central Maine Partners members has "not been disrupted in any way" by the sale, said Karen Foster, senior vice president of Anthem Blue Cross and Blue Shield of Maine. "We are an HMO, and we know the business," she said.
The sale was completed Sept. 1.