Managed care deals have fallen off the radar recently. In all of 2018, we saw just 25 announcements, down 51% from the year before.
The marketplace is certainly undergoing significant changes, as CVS Health (NYSE: CVS) moves ahead with its new subsidiary, Aetna, to create Health Hubs within its retail stores. That combination took Aetna off the acquisition trail. Likewise, Cigna‘s (NYSE: CI) acquisition of pharmacy benefits manager Express Scripts in 2017 took that managed care company out of the market for the moment.
Now comes the unusual combination of Blue Cross Blue Shield of North Carolina (BCBCNC), based in Durham, and Cambia Health Solutions out in Portland, Oregon.
Blue Cross and Blue Shield of North Carolina (BCBSNC) covers approximately 3.7 million people and had 2018 revenue of approximately $9.9 billion.
Cambia Health Solutions sells Blue plans under the Regence brand name in Oregon, Utah, Idaho and much of Washington state. It covers 2.6 million members and had revenue of about $6 billion in 2018.
The national Blue Cross Blue Shield group of insurers includes 36 companies covering more than 100 million Americans.
Patrick Conway, CEO of BCBSNC, will become the CEO of the combined company, which will retain the Cambia Health Solutions name. The goal of this deal is to bolster their combined investments and speed progress in developing new health-data approaches and consumer tools, among other things.
But don’t call this a merger. BCBSNC will legally remain a separate company, although it will sign a 20-year agreement for the revamped Cambia to manage its operations.