Cambia, BCBS of North Carolina link to form $16B insurer
- Nonprofit healthcare company Cambia Health Solutions and health insurer Blue Cross Blue Shield of North Carolina are combining to create a payer that will cover more than 6 million people and have a joint revenue of $16 billion. Cambia, which includes more than 20 healthcare companies, also operates Blues Cross Blue Shield plans in multiple western states.
- The entity will remain under the Cambia name and be helmed by current Blue Cross North Carolina head Patrick Conway. BCNC will remain a separate company, according to the press release, but will contract with the new Cambia for 20 years to manage its operations. Neither company will acquire the other or pay out any money.
- The partnership is an extension of the existing relationship between Portland-based Cambia and Durham-based BCNC. The two previously joined to create strategic investment firm Echo Health Ventures, launched in 2016 to fund early-stage healthcare companies.
The marriage between the two long-established and powerful regional Blues players is a bit of a surprise, considering the 36 companies in the Blue Cross Blue Shield group have largely avoided the spate of recent consolidation that's swept up the rest of the industry. Collectively, they cover more than 100 million Americans.
Cambia oversees six health plans in Oregon, Washington, Idaho and Utah covering 2.6 million members.
Conway espoused the benefits of the new company on Twitter, calling it a "mission-driven not-for-profit" that can "make a real difference."
We all want a health care system that’s more affordable, easier to use and more personal. Working together with another mission-driven not-for-profit, we can make a real difference! This will be better for our customers and local communities! https://t.co/bzjQdxpI4v— Patrick Conway (@PatrickConwayMD) March 12, 2019
Cambia's board of directors will be composed of 10 members from BCNC's current board and nine from Cambia's. Current Cambia CEO Mark Ganz will be executive chair of the venture. Along with being the new CEO of the insurer, Conway will remain at the head of BCNC, which will retain its own board, corporate structure and name.
BCNC reported roughly $10 billion in revenue last year and covered 3.7 million North Carolineans. The payer has a strong reputation for doggedly pursuing value-based care (Conway is the previous head of CMS' innovation center), including Blue Premier, a value-based care model announced in January that includes two-sided risk sharing for participating ACOs.
The deal will require approval from state legislators in North Carolina, Oregon, Washington, Idaho and Utah. Washington Insurance Commissioner Mike Kreidler said in a statement Tuesday he would work closely with other state regulators in reviewing the merger plan. "The process will take several months as we carefully assess the potential impact of the proposal on policyholders and the health insurance market, as well as its compliance with state insurance laws," he said.
The payer will be headquartered in Durham and Portland.
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