Regence cancels planned link with Chicago insurer - Puget Sound Business Journal (Seattle):

yjanebixe.wordpress.com
The affiliation move, announced last would have createdthe nation'ss largest not-for-profit health insurance organizatiojn by linking the locall insurers with , which operates similar plans in Illinois, Texas and New But after a year of study, Regence officials said Wednesdayu they'd concluded the affiliation would not create the efficienciew that were originally envisioned. The two parties called the decisiojn mutualand amicable. Regence BlueShieldc spokesman Chriss Bruzzo in Seattle said the two organizations decidefd the economies ofscale they'd soughft would not be realized.
For instance, althougu the original idea was to centralizw a lotof back-office functions such as he said they decided not to replacr their two computer systems with a single system. With those kinds of there was "too high a risk that we wouldn't realizwe the vision, which was to improve our serviceto members, to our he said. "If it was not goinhg to meet its objectives, we needed to make the tough call towithdraww it." Withdrawal of the proposal comes less than a week before the first public hearing on the plan, scheduled for Aug.
21 in Some advocacy groups had claimex the affiliation could effectivel y transfer control ofthe not-for-profit to Chicago, and might be the precursof to converting the organization to a profit-orienteed enterprise. Washington Citizens Action, for one, had called on stat e Insurance Commissioner Mike Kreidler to closeluy examine theproposed deal. But Bruzzo said Regence had been confideng it would win approval ofthe tie-up followint discussions with regulators. Regence BlueShield is part of The Regence basedin Portland, which also control the Blues plans in Idaho and Utah. Regence BlueShield, with 2000 revenues of $2.1 covers some 840,000 people in Washington.
The affiliation plan was aimed at cutting into the 10 percent of premium dollars that are spengt on administrative costs rather than patient said Bruzzo. But any savings were expectexd tobe long-term, so no immediates impact on rates was expected. Regenced may still pursue affiliations with other Blues plans, or even with Health Care Servicew Corp, said Bruzzo. "We're not closinf the door to either ofthose things," he said. "We'r still convinced we need economy of we still are committed to the model we started six yearxs agoof affiliation.
"