North Carolina Affiliation Makes Cambia a National Player
Cambia Health Solutions landed a new strategic affiliation far from its western base, a partnership that could give it new influence and power in the nonprofit Blue sector.
Blue Cross Blue Shield of North Carolina and Cambia will team up through a strategic affiliation, with NC Blue CEO Patrick Conway, M.D., becoming CEO of Cambia, and Cambia CEO/President Mark Ganz becoming the become board of directors’ executive chairman.
The deal was announced March 12 and must receive regulatory approval in its respective states.
Through a long-term management services deal, the companies will share management, administrative, operational, and other services. Under the affiliation, both organizations will maintain individual corporate nonprofit operations, headquarters in North Carolina and Oregon, and Conway will also stay CEO of NC Blue.
In the realm of Blue plans, this marks a major realignment, giving Cambia clout beyond that of a regional player. Cambia has 1.5 million lives covered by four Blue plans in the Pacific Northwest and Intermountain West – Regence Blue Cross Blue Shield of Oregon, Regence Blue Shield of Idaho, Regence Blue Cross Blue Shield of Utah, and Regence Blue Shield of Washington. With nearly 2 million lives, NC Blue has a 40 percent market share as of July 2018, dominating its state like most Southeastern Blue plans (DRG statistics).
By spreading technology costs and other innovations across a larger footprint, the Cambia Blue plans will be able to deploy new technologies and share innovations more quickly and to a large member population. NC Blue’s expertise in value-based care through Blue Premier, under which the insurer and health systems jointly share risk, could be adopted by Cambia’s four other Blue plans. It would not be a stretch to see the affiliated plans partner on pharma initiatives like clinical pathways or value-based drug contracts.
At the moment, this affiliation is unlikely to kick off a round of further affiliations among Blue plans. The nonprofit Blue are typically slow to move on deals like these. This marks the first major union among the nonprofit Blue plans since Montana Blue joined Health Care Service Corp. in 2013.
North Carolina Blue and Cambia had existing ties that made this an organic move. Since 2016, the two have partnered on Echo Health Ventures, which invests in growing healthcare companies.
However, with full mergers requiring greater regulatory scrutiny, the strategic affiliation could represent a method for other Blue plans to partner with larger organizations like Cambia and more quickly leverage their resources. It has been successful among health systems, with independent hospitals partnering with larger chains, and could be an alternative for nonprofit Blue plans.
Bill Melville is a principal analyst at DRG and national healthcare policy expert whose work appears in Health Plan Analysis and Market Overviews. Follow him @BillMelvilleDRG