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Elevance Well being acquires Blue Cross Blue Protect Louisiana | Healthcare/Hospitals

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Blue Cross and Blue Protect Louisiana plans to hitch Elevance Well being, previously generally known as Anthem, in an acquisition set to shut later this yr, the 2 firms introduced Monday.

Blue Cross and Blue Protect Louisiana is the state’s largest insurer, with greater than 1.9 million policyholders. They’ll be a part of Elevance’s 119 million-person community, which incorporates prospects exterior of the Blue Cross model. The 2 firms declined to say how a lot the deal price.

The three,000 Louisiana staff will even be a part of Elevance, however operations for the Louisiana plan will stay at Blue Cross headquarters in Baton Rouge, mentioned Blue Cross CEO Dr. Steven Udvarhelyi.

Blue Cross and Blue Protect of Louisiana President and CEO Dr. Steven Udvarhelyi, pictured on Wednesday, July 28, 2021. (Picture by Chris Granger | The Instances-Picayune | The New Orleans Advocate)

“We’re going to keep right here as a locally-based Blue plan,” mentioned Udvarhelyi. “We’re going to keep in our workplaces.”

Udvarhelyi mentioned policyholders ought to count on that their plans would proceed with out modifications in the meanwhile. As soon as the acquisition is full, Udvarhelyi and Elevance Govt Vice President Morgan Kendrick mentioned members might count on an enlargement in what they referred to as “entire well being capabilities” — reminiscent of an integration of behavioral well being and bodily well being, additional consideration to high-risk seniors, pharmacy options and palliative care.

“As soon as we be a part of Elevance, we are going to get in two years the advance in capabilities that, if we did on our personal, would take us 10 years to do,” mentioned Udvarhelyi.

Louisiana would be the fifteenth state-run Blue Cross plan to hitch Elevance, which modified its identify from Anthem Inc. final yr because it aimed to rebrand itself as an organization with broader well being pursuits.

Price, rules drove acquisition search

Blue Cross started looking for such a partnership two years in the past, in accordance with Udvarhelyi, on account of the rising prices of buying digital capabilities and problem in quickly investing in companies, reminiscent of these for power sicknesses, palliative care and behavioral well being.

“The price of doing that and time to scale is simply changing into giant,” mentioned Udvarhelyi. “Layer on prime of that, we’re all topic to rising quantity of regulation on the federal and generally the state degree.”

The insurance coverage business can also be made up of more and more bigger gamers, which has made it tougher for smaller outfits to maintain up.

“We won’t play on that taking part in subject the way in which we’re immediately, however in becoming a member of with Elevance, we may have entry to a lot higher sources the place we are able to truly compete with nationwide rivals in a way more significant manner,” mentioned Udvarhelyi.

Deal is topic to state, federal approval

The settlement is topic to approval from the Louisiana Division of Insurance coverage and the Division of Justice Federal Commerce Fee. Up to now, insurance coverage firm acquisitions have been derailed over issues they might lower competitors available in the market.

Well being care economist Walter Lane, a professor on the College of New Orleans, mentioned the deal is unlikely to be flagged by regulators as a result of it would not contain two Louisiana firms merging for an even bigger piece of the medical insurance pie, and subsequently would not enhance the corporate’s focus on this space.

“Blue Cross is already the large gorilla available in the market holding the vast majority of polices,” mentioned Lane. “As a result of all the opposite (Elevance firms) are in different states, it would not look like it might make a distinction within the aggressive atmosphere.”

Such mergers are usually motivated by a couple of various factors, Lane mentioned. One is that a big firm has an even bigger base to unfold threat out throughout policyholders. The extra people who find themselves members, the much less it hurts the insurance coverage firm financially when some policyholders have sky-high medical prices.

Working bills reminiscent of claims processing ought to go down, mentioned Lane, and becoming a member of an even bigger firm may assist Blue Cross shield towards catastrophic losses, reminiscent of a localized outbreak of illness.

The impact on well being care prices, high quality

Becoming a member of a bigger firm will give BCBSLA more cash to put money into potential enhancements for policyholders, mentioned Vivian Ho, a well being economist at Rice College and a professor at Baylor Faculty of Medication. However there’s little knowledge on how mergers have an effect on prospects.

“There simply have not been research displaying that there is any enchancment in high quality after insurers consolidate,” mentioned Ho. “The insurer can obtain financial savings, however as a result of it’s a concentrated market, there’s nothing to drive them to go financial savings alongside.”

Udvarhelyi cited well being care inflation as one other driver for the merger, and acknowledged that he cannot predict how prices will change. However he mentioned the companies and platforms BCBSLA would have entry to via Elevance would assist management prices.

“What I can say for our prospects and policyholders, they may see higher enhancements in well being and decrease will increase in the price of well being care than if we keep doing this alone,” mentioned Udvarhelyi.



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