Now that merger candidates Advocate Health Care and NorthShore University HealthSystem have split just shy of the altar, Blue Cross and Blue Shield of Illinois is playing the role of the relative who breathes a sigh of relief.
The dominant insurer in the state didn't support the merger even when some of its rivals did, including national players UnitedHealthcare and Aetna. Now Chicago-based Blue Cross, which already has a delicate relationship with Advocate, won't have to haggle with a much larger player over reimbursement rates. What's more, a Blue Cross executive who testified in April's trial said that the possibility of Advocate getting an insurance license post-merger posed a "small threat" to the Illinois Blues plans.
A Blue Cross spokeswoman said the insurer continues to work "with healthcare providers to create networks that allow our members access to quality, cost-effective care."
Combined, Advocate and NorthShore would have been the 11th largest nonprofit health system in the nation, a 16-hospital system stretching from north suburban Libertyville to downstate Normal. Federal regulators alleged the giant network would have commanded about 60 percent of hospital services in the northern suburbs.
"(Insurers) don't want organizations to get too big because it limits their ability to really manage a lot of the negotiating," Dan Marino, a Chicago-based executive vice president at consultancy GE Healthcare Camden Group, says of Blue Cross.
Yesterday, Downers Grove-based Advocate and Evanston-based NorthShore ended their years-long fight to merge after a federal judge sided with the Federal Trade Commission. In the nationally watched case, federal regulators argued that a combined Advocate-NorthShore would significantly hike prices and harm consumers.
The CEOs of health systems, meanwhile, said their marriage would do the opposite, contending that the combination would have lowered costs for consumers and boosted quality.
Both Advocate and NorthShore declined interview requests, but in separate statements expressed their disappointment. "The time, cost, and uncertainty of pursing any additional appeals would not be worthwhile," each CEO said in his statement.