THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, October 20, 1994 TAG: 9410200388
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MARIE JOYCE, STAFF WRITER
LENGTH: Medium: 56 lines
Trigon Blue Cross Blue Shield, the state's largest health insurer, will gain a firmer foothold in South Hampton Roads by combining its health maintenance organizations with those owned by local Tidewater Health Care.
The merger will create the region's second-largest health maintenance organization, covering about 50,000 people under four separate plans.
The deal, announced Wednesday, will take effect early next year if approved by the State Corporation Commission.
Tidewater is the Virginia Beach company that owns Virginia Beach General Hospital, Portsmouth General Hospital and several other health care businesses. The deal won't affect ownership of any of the company's other holdings.
Trigon will benefit by gaining a strong local presence and local customer-service operations, spokesman James Goss said. The headquarters of the new operation will be in Virginia Beach and Tidewater's local management will be retained.
Tidewater will gain by tapping into the larger company's HMO network, which covers 110,000 people in a crescent from Washington to Richmond and Hampton Roads.
Tidewater's HMOs are limited to South Hampton Roads. That's kept them from doing business with companies that have offices in several cities around the state, said Vicky Gray, a senior vice president.
Under the new arrangement, Tidewater will be able to compete for statewide contracts by offering companies a single plan for employees in different cities, Gray said.
People enrolled in Trigon's and Tidewater's HMOs won't see an immediate change, said Gray and Goss. Current contracts will remain in effect.
Trigon owns two HMOs, HealthKeepers and HMO Virginia, covering about 26,000 people in South Hampton Roads. Tidewater's HMOs operate under the names Priority Health Plan and Health First and cover 21,000 people.
Trigon will hold the majority interest in the new company. Tidewater will have an equal voice on ``significant operation issues,'' such as how the system administers patients' care, Gray said.
Trigon officials refused to reveal financial specifics of the deal.
Although each company will double its local enrollment, the combination will still be one-third the size of the area's largest HMO administrator - Sentara Health System.
Sentara's two health plans, Sentara and Optima, cover about 150,000 people in Hampton Roads.
Gray said the merger will make Tidewater a stronger player in the market.
``We're competitive against Sentara - and our HMO products are competitive with any other HMO products out there,'' she said. by CNB