Blue Crosses In Md., Va. Eye Selling Stock; Insurers Seeking Capital For Managed-Care Rivalry
The historically not-for-profit Blue Cross and Blue Shield health plan based in Maryland has a new strategy for raising money: creating a for-profit subsidiary and selling stock worth as much as $50 million to the public.</br></br>The Blue Cross and Blue Shield plan based in Virginia is considering trying to convert itself entirely into a publicly held, for-profit company. Blues plans in California, Missouri, Wisconsin and Indiana already have tapped the stock market for funds.</br></br>These insurers' strategies show how far the nation's Blue Cross and Blue Shield plans have traveled from their roots - and how blurry some of the distinctions between the Blues and their commercial competitors have become.</br></br>Matching an industry trend, the Blues have shifted their emphasis from conventional health insurance to managed care, which can demand large investments in computer systems, medical facilities and personnel, among other things.</br></br>"They need to build a strong capital base so they can compete with the giants," said Donald Brandenberg, chief actuary for the Maryland Insurance Administration.