Blue Cross Blue Shield of Delaware selects Highmark as affiliation partner

Blue Cross Blue Shield of Delaware (BCBSD) announced today that it has signed an affiliation agreement with Pennsylvania-based Highmark Inc. (Highmark) that will position BCBSD to remain a strong local leader in the health care marketplace. This announcement is the culmination of a four-year corporate strategic planning process for BCBSD.

"After careful deliberation, we have selected Highmark, also a Blue Cross and Blue Shield plan, as our proposed affiliation partner," said Timothy J. Constantine, president and CEO of BCBSD. "We recognize that it will become increasingly difficult for small, independent plans to access the capital required to make the necessary investments to stay competitive." He added, "This affiliation will allow us to retain our not-for-profit status, enhance operations, maintain financial stability and continue to provide the high level of local service that our customers and providers expect."

The affiliation will require review and approval by the Delaware Department of Insurance before it becomes effective. Once effective, the new structure will allow Highmark and BCBSD to become more cost effective through shared investment in systems and capabilities. This regional affiliation will afford both companies greater economies of scale and the ability to streamline operations, while maintaining their strong local presence and focus on community support.

"Through this new relationship, BCBSD will have access to a wide range of Highmark's capabilities, including enhanced customer services, such as online provider cost information and wellness programs, while physicians and hospitals will see real-time claims estimation and adjudication capabilities,"  said Constantine.  "In addition, this affiliation with Highmark will enable Blue Cross Blue Shield of Delaware to remain competitive, and continue as a significant local employer and contributor to the local economy."

Under the agreement, BCBSD will become an affiliate of Highmark, but will continue to operate as a separate legal entity headquartered in Delaware. Mr. Constantine will remain the president of BCBSD.

"As the health care marketplace continues to evolve with the passage of health care reform, it is imperative for health insurers to reduce their administrative costs and operate more efficiently. This affiliation will help the two companies achieve that vital goal," said Dr. Kenneth Melani, president and CEO of Highmark. "BCBSD will retain and emphasize local relationships with customers, hospitals, doctors, other providers and the community as a whole."

"During the past decade, Highmark has established strong business affiliations and relationships with other Blue Cross and Blue Shield companies, including Mountain State Blue Cross Blue Shield in West Virginia," said Melani. He added that the affiliation with BCBSD will be similar in scope to the successful business relationship with Mountain State, "benefiting our customers and the communities we serve and in which we operate."