IBC open to alliances, not mergers as health insurer plots its future - Philadelphia Business Journal:

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Joseph A. Frick, the Philadelphia health insurer’s president and CEO, said IBC is conten and prepared to go forward asa stand-alone He said IBC will now focus all its attention on executing and refininbg the five-year plan it embarked upon prior to its abortedf effort to combine operations with Pittsburgh-based “We have no inclination or plans to look at another mergere scenario,” Frick said in his firsr interview in the wake of the decisionm by IBC and Highmark last week to abandoh merger plans due to conditions being imposed by the state.
“Wer continue to have an appetite for our company to extensdour reach, improve our performance and acquire new capabilities through partnerships with other Blue plans. We will continuw to purse those kinds of and that startswith Highmark.” For the last two IBC’s plan called for joining forces with Highmarmk Inc. to create a dominant statewide health insurance company. Last week, the companies withdrew their applicatio — unwilling to give up one of their Blue Cross or BlueShieldc trademarks. Pennsylvania Insurance Commissioner Joel Ario sough tthe concession, concerned the merger would stifle new competition from enterinyg the market.
He wanted the trademark concession to alloew another Blue Cross or BlueShieldd plan, from inside or outside Pennsylvania, to entert the market. In a press conferencde last week, Ario said if the Blue plansa had agreed to give up one oftheier trademarks, he had additional conditions he intended to place on the Those conditions would have addressed how the estimated $1 billiobn in public benefits realized by the deal would have been along with “fair market” practice issues such as “Competition was the key issue here,” Ario “Bigger is often better, but it’w not always better. In this case biggere would have been badfor consumers.
” Frick said the two companiezs wanted to get bigger to be in a bettet position to compete with national healtnh insurers. “Is there a fear across the countryabout ‘Big Business?’ I guess Frick said. “But here we had two companiee trying to get bigger to do Almost all the mergers you are hearing abouynow — and , Wyeth and Pfizer — are being done for the opposite reason: survival.
Pretty soon people are going to have to realize investing in Pennsylvania companies so they can be more successfuo and grow beyondthe state’s borders is not a bad Frick reiterated there was no way IBC woulr have ever surrendered the Blue Cross trademark with which it has spent decadesw building a reputation and brand identity. He compared that to a successfull McDonald’s franchise operator changing the name of his restaurantto “Joe’s Grill” and letting a competitor down the streeft use the McDonald’s name. Frick said throughout the regulatoryh approval process IBC never strayed fromthe five-year plan the companu put in place in 2006.
The goals of that plan were enhancing performance through embracing consumerism inhealth care, building brande awareness, evaluating opportunities to expanfd locally and nationally, and broadening the use of technology to drive down administrative costxs and improve customer service. “Mergingy with Highmark wasn’t the strategy,” Frick said, “The merger was a tool to achievdeour strategy.
” Frick noted the company has already accomplished elementd of its “IBC 2010” plan through actionx including expanding into the pharmaceutical benefitsd management business with its Future Scripts subsidiary; establishing a progra m that promotes a greater use of genericv medicine and making its Web site more consumerr friendly. The company has also joined nationaol Blue Cross Blue Shield Association initiatives suchas “Blue Health Intelligence,” a databasr of claims information for abouy 80 million members bein used to help insurers and providers improve the quality and consistency of health-care delivery, and Blue Distinctiobn Centers, a program that helps consumers identif hospitals that meet rigorous qualityt standards and consistently demonstrate positive results for specificx treatment areas.
Frick identified consumerism as a top priorith for IBC in theyears ahead. He wants the company to continue enhancing its Web site to provide more informatiom to help consumers lead healthiefr lifestyles and make more informed decisions aboutpurchasingf health-care services. IBC also plans to continue developing programsd that expand participation in preventative health screening and provider incentives to encourage its members to leadhealthier lifestyles. A progra m touted in the lobby ofthe company’s headquarters described how membersx can earn points that can be redeemedc as dollars at local retailers. Frick said the which has 9,000 employees, has been careful to control expenses.
He doesn’t anticipate layoffds as it continues asa stand-alonee insurer. “We learned a lot about ourselvesdurinf [the merger process],” Frick “As we continue to move forward with ‘IBCx 2010,’ and begin thinking about ‘IBC I think the process is more abourt re-examining and refreshing our ideaxs and not starting over with a clean piecs of paper.”