The Virginian-Pilot 
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1995, Landmark Communications, Inc.

DATE: Tuesday, May 16, 1995                  TAG: 9505160407
SECTION: BUSINESS                 PAGE: D1   EDITION: FINAL 
SOURCE: BY MARIE JOYCE, STAFF WRITER 
                                             LENGTH: Short :   45 lines

PRIORITY, TRIGON HMOS TO MERGE THOSE CUSTOMERS ENROLLED IN TRIGON'S TRADITIONAL HEALTH INSURANCE CAN EXPECT BIG CHANGES AS THE COMPANY TRIES TO SHIFT THEN TO MANAGED CARE.

After a seven-month engagement, Tidewater Health Care and Trigon Blue Cross Blue Shield said ``I do'' Saturday, when the companies officially merged their health maintenance organizations.

The 53,000 Hampton Roads residents enrolled in Priority and in Trigon's HMOs won't see much difference, said Priority President Russell F. Mohawk. Existing contracts won't change, and customers might have a few more options to choose from when they re-enroll.

But the 225,000 local people enrolled in traditional health insurance from Trigon can expect big changes. Over the next three to five years, the company will try to shift most of them into managed care.

Managed care is a system in which insurance companies control costs by using preventive medicine and by limiting patients' visits to specialists. Patients must get their care from doctors approved by the plan.

Mohawk said the customers in Trigon's traditional plans probably would be moved gradually, enrolling first in preferred provider organizations. PPOs contain some elements of managed care but also allow patients to go to doctors outside the plan, although the patients pay more for the privilege.

Under the new system, Trigon took majority ownership of Priority, and the name of a Trigon HMO - HealthKeepers - will be attached to all Priority's plans.

Priority's biggest competitor, Sentara Health System, has about three times as many customers.

But Priority officials predict big things. In theory, at least, the company could become larger than Sentara if it moved all traditional policies into managed care.

Mohawk said the merger will give Priority access to a vastly expanded market. Richmond-based Trigon has outposts throughout the state. Trigon, on the other hand, will benefit from a local presence. The new HMO will operate out of Priority's Virginia Beach offices. by CNB