HealthLeaders-InterStudy, the leading provider of managed care market intelligence, reports that while for- profit conversions of Blue Cross Blue Shield plans have stalled in recent years, the nonprofit Health Care Services Corp. (HSCS) is strongly positioned to expand its footprint by acquiring other nonprofit Blue plans.
"The company has plenty of access to cash for acquisition purposes, and consolidation could be appealing to smaller nonprofit Blue plans that need to improve their IT systems or tackle other large products," said Roy Moore, market analyst at HealthLeaders-InterStudy.
According to the new Blue Profiler: Health Care Services Corp., one in a series of reports focusing on the major nonprofit Blue Cross Blue Shield plans, over the past decade HCSC acquired Blue Cross Blue Shield plans in Texas, Oklahoma and New Mexico to add to its original plan in Illinois. The company experienced revenue growth of almost 11 percent from 2005 to 2006, with total revenues of close to $13 billion. In addition to its strong financial position, HCSC has undertaken numerous IT initiatives, including a statewide e-prescribing program in Illinois that involves other insurers and online options for members that provide price quotes, enrollment options and healthcare management tools.
The one area where HCSC is not competitive is Medicare Advantage products. The company has more than a half million Medicare supplement members -- including more than 300,000 in Illinois -- but no Medicare Advantage products in that state.
"Like many Blue Cross Blue Shield plans, HCSC has been cautious in Medicare Advantage, but they have strong Part D enrollment in Illinois and it makes sense for them to move into Medicare Advantage products," said Moore. "They're offering middle-of-the-road Part D plans - neither the most expensive nor the cheapest."
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