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Bounceback: Blues thrive as markets cool toward HMOs
Robert Cunningham1, Douglas B Sherlock
1Sherlock Company, Gwynedd, Pennsylvania, USA.
Health Affairs (Project Hope)
|March 20, 2002
Summary
Blue Cross and Blue Shield (BCBS) plans show significant enrollment growth and positive financial performance. Key success factors include long-term stability, extensive provider networks, and prudent financial strategies.
Area of Science:
- Health Services Research
- Health Economics
- Business Strategy
Background:
- Blue Cross and Blue Shield (BCBS) plan enrollment has increased by nearly 17 million since 1994.
- Most BCBS plans are reporting positive financial performance, irrespective of ownership structure (for-profit, nonprofit, mutual).
- Managed care organizations have experienced market share loss during the same period.
Purpose of the Study:
- To analyze the distinctive features contributing to the recent successes of Blue Cross and Blue Shield plans.
- To identify competitive advantages of BCBS plans compared to other managed care organizations.
Main Methods:
- Journalistic analysis integrating insights from financial analysts.
- Incorporation of perspectives from health services researchers.
- Inclusion of observations from Blue Cross and Blue Shield officials.
Main Results:
- BCBS plans have achieved substantial enrollment gains and positive financial indicators.
- Success is attributed to a combination of factors across different plan types.
- Long-term stability, broad provider networks, and conservative financial management are identified as key advantages.
Conclusions:
- The strategic advantages of BCBS plans, including stability and network breadth, have enabled them to outperform many competing managed care organizations.
- Conservative financial management has played a crucial role in the sustained success of BCBS plans.
- The findings highlight the resilience and adaptability of the Blues system in a dynamic healthcare market.