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No Expected Changes for Merger Termed 'No Bailout'

Blue Cross and Blue Shield of Florida assured doctors and patients in Volusia and Flagler counties that no foreseeable changes are likely when the health insurer soon purchases Florida Health Care Plans Inc. for roughly $85 million.

The health plan's 57,000 members and their doctors should expect a smooth transition, said Barry Schwartz, MD, vice president for network management of Blue Cross and Blue Shield of Florida.

"We will continue to exist as a locally run organization," Schwartz said. "There will be business as usual for the foreseeable future."

The sale of Florida Health Care Plans (FHCP), the state's oldest HMO, was announced in August when the board of commissioners for Halifax Health – which owns the HMO – agreed to the sale. Halifax Health also owns a 764-bed Daytona Beach hospital and an 80-bed Port Orange hospital.

The actual sale will officially be completed in November or December following a period of due diligence and regulatory approval. Existing provider contracts will continue, while any new contracts will most likely be negotiated in December, Schwartz said.

"What rate changes occur in the future will depend on the market," said Schwartz.

For the time being, even after the sale, FHCP will retain its name and remain under its existing management and organizational structure, similar to an arrangement that has retained Capital Health Plan under the Blue Cross umbrella in Tallahassee for several years. Blue Cross will also continue to run its existing HMO, Health Options, without merging the two entities.

The benefits, say doctors, are that FHCP's 57,000 members will have immediate access to Blue Cross services and healthcare providers in an expanded statewide and national network. Previously out-of-network charges will no long apply in many cases because Blue Cross already contracts with providers throughout Florida as well as other states. Consumers may expect a discount on hospital visits to Orlando Regional or other nearby hospitals because of lower rates that Blue Cross has previously negotiated.

As for the roughly 800 employees at FCHP fearing downsizing, Schwartz said no one will lose his or her job as a result of the current merger, but that the FHCP had already discussed possible layoffs before the merger took place.

Salina Wang, PR representative for Halifax Health, did not return repeated requests for comment.

"We will not be reducing employees anywhere beyond what plans were already in place," Schwartz said. "Everybody is looking to optimize their workforce."

Schwartz said the Blue Cross takeover should not be viewed as a bailout. "It's a merger where both sides see advantages," he said.

Elizabeth Eads, DO, president of the Volusia County Medical Society, said she felt the sale would result in better patient care.

"From a physician's perspective, any company such as Blue Cross and Blue Shield with those kinds of resources is going to be a huge benefit for our patients because it will increase access to care to multiple hospitals and facilities," Eads said.

Florida Health Plans has been restrictive in their physician panels and availability of specialties, said Eads, who's had some difficulty in the past trying to refer patients to specialists.

"As a physician trying to refer patients, from a physician standpoint, this is going to be a positive," Eads said.

Many doctors in the area, such as Eads, already participate in a Blue Cross HMO provider networks as well as its PPO networks, so switching over from Florida Health Plan's won't be a large surprise.

Eads said she was looking forward to the advantages that Blue Cross will likely bring, such as cost controls.

"Blue Cross brings its organization that's solid," Eads said. "Fundamentally, they control healthcare costs very well."

"The board's decision to approve this sale is consistent with our commitment to expand access for members, and will ensure the continued high-quality care for which Florida Health Care Plans is known," said Jeff Feasel, president and CEO of Halifax Health, based on a press release. "This is in the best interests of FHCP members, employees, and physicians, as well as Halifax Health and the communities we serve."

"This will combine the best features of a large statewide and national health plan with the responsiveness and local decision making of our community health plan," said Butch Simpson, CEO of Florida Health Care Plan, also based on a press release.

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