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Blue Cross Companies to Combine Life and Diversified Business Products

Posted on: Tuesday, 12 July 2005, 00:00 CDT

Jul. 12--Blue Cross and Blue Shield of Florida said Monday it has combined its life and diversified business products division with that of Arkansas Blue Cross and Blue Shield -- a deal officials said will offer customers more products and services.

The businesses have been combined under a new jointly owned holding company, Life and Specialty Ventures LLC based in Little Rock, Ark. Its board and executive leadership team will consist of officials from both Blue plans.

"This alliance enables Arkansas, Florida and other Blue partners to have access to products and services that are superior to what each plan could otherwise offer independently," Jason Mann, chief executive officer of Life and Specialty Ventures said in a statement.

Jacksonville-based Blue Cross and Blue Shield of Florida, which employs about 9,300 in Florida including about 8,000 locally, has about 6.6 million customers statewide. The life and diversified business products business employs about 195, the majority of whom are in Jacksonville, spokeswoman Lisa Acheson Luther said in an e-mail.

"We have no immediate plans for [employee] reductions," she said. "The alliance may result in growth opportunities and we're currently evaluating if additional capacity is required."

As part of the deal, Life and Specialty Ventures owns 70 percent of USAble Life and 100 percent of Florida Combined Life Insurance Company/Florida Combined Insurance Agency.

USAble Life manages and markets life and disability insurance products for 11 Blue Cross and Blue Shield plans including Florida, Arkansas, Hawaii and Tennessee. Florida Combined Life Insurance Company/Florida Combined Insurance Agency manages and markets insurance specialty products -- dental, long-term care, workers' compensation administrative services, flexible spending and health reimbursement accounts.

Luther could not say if the formation of Life and Specialty Ventures would mean lower costs for customers.

But the alliance, she said, should help both Blue Cross plans achieve greater economies of scale, improve efficiency and allow it to offer improved products at more affordable rates.

As for whether the improved efficiency would help trim Blue Cross Florida's costs, the spokeswoman said, "it's still too early to tell."

Brian Klepper, president of the Jacksonville-based Center for Practical Health Reform, says collaboration typically helps drive down costs by allowing the plans to share infrastructure. And those cost reductions would presumably be passed onto customers, he said.

Blue Cross competitor Humana Inc. is also expanding divisions, including its senior benefit business which provides health insurance benefits to the company's Medicare customers, across the region and nation, spokesman Mitch Lubitz said. Such a strategy helps develop a broader customer base, integrate different business lines and reduce costs through economies of scale.

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Source: The Florida Times-Union

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