BCBSAZ, Banner Health form joint venture of Medicare Advantage
PHOENIX - Blue Cross Blue Shield of Arizona and nonprofit health system Banner Health have announced an equal partnership designed to provide a coordinated Medicare Advantage plan to be known as Blue Cross Blue Shield of Arizona Advantage.
The new BCBSAZ Advantage plan will include Medicare Advantage plans that currently are operated by Banner under the Banner MediSun Medicare Health Plan name. These plans, which cover more than 23,000 members, have been owned by Banner for the last four years as a result of its $316 million acquisition in 2008 of Sun Health Corp.
According to Chuck Lehn, CEO of Banner Health Network, the move to developing the Medicare Advantage joint venture with Blue Cross Blue Shield of Arizona builds on earlier work the two companies have conducted in creating a narrow network insurance product for the commercial market called Blue Alliance. It also fits into Banner's long-term vision of where the healthcare market is headed.
"We believe that financing and the delivery of healthcare need to come closer and closer together," said Lehn. "This is about Banner being able to focus on the clinical product and Blue Cross Blue Shield being able to service the customer and marketing and sales. We see it as a way for us to bring together and reduce our administrative cost and bring together the financing and delivery of healthcare."
For Blue Cross Blue Shield of Arizona, creating the joint venture with Banner and its MediSun Medicare Advantage plans fits well with its existing line of plans targeted toward the senior market, its Medicare supplement products and its Medicare Part D prescription plans that count nearly 25,000 members.
"Aligning with an established Medicare Advantage partner like Banner MediSun allowed us to accelerate our speed-to-market," said Regena Frieden, a spokesperson for BCBSAZ. "It also provided us with a unique opportunity to align our company with Banner Health, which has been positive as we both share a commitment and culture of service excellence."
While BCBSAZ's existing Medicare products won't be rolled into the joint venture, at least initially, the new relationship between the two companies via the joint venture will allow the sales staffs of both companies to offer a broader range of products for seniors. Richard L. Boals, president and CEO of BCBSAZ, noted in an announcement of the formation of the new holding company that the deal "furthers our position to compete as an industry leader during a transformative time in the healthcare industry."
For now, the new BCBSAZ Advantage plans will only be offered in the existing MediSun market area in greater Phoenix, which includes all of Maricopa County and a portion of Pinal County.
And while the company positions both the insurer and the provider group to worker closer together to make the financing and delivery of care more coordinated, it is also one that recognizes the ongoing demographic shift occurring in the country as the Baby Boom generation hits 65.
"We believe there will be many changes in the Medicare program over the next decade or so: the swell of Baby Boomers entering the program and the fiscal challenges of the program," noted Lehn. "We wanted to make sure we had a sound long-term strategy that gave us a broad range of products. Blue Cross Blue Shield also has a large commercial plan and many of those members who are used to having that insurance will soon be joining the Medicare ranks over the next decade so we thought they would make a good partner."