By Todd Cohen
CHAPEL HILL, N.C. — Picking a board and setting funding priorities top the big jobs facing the huge new charitable foundation that would be created if, as expected, Blue Cross and Blue Shield of North Carolina becomes a for-profit business.
Under state law, all of the Chapel Hill-based not-for-profit insurer’s stock would go to the foundation, which then would sell shares in an initial public offering.
“I believe what would be created here is the largest foundation in the history of North Carolina dedicated to health care in North Carolina,” says Blue Cross CEO Bob Greczyn. “The market will set the value of the company.”
According to estimates by the North Carolina Health Access Coalition based on Blue Cross conversions in other states, assets of the new foundation could range from $1 billion to $2 billion.
And the foundation would be born with big burdens, experts say.
“The problems and pressures on the foundation will be multiplied because of the amount of money they will have available,” says Adam Searing, project director for the Raleigh-based coalition, a consumer health advocacy group.
Anticipating a possible conversion, state lawmakers in 1998 passed legislation spelling out how a conversion would take effect, including creation of the foundation.
Experts expect the insurer’s pending acquisition of Partners National Health Plans of Winston-Salem for $202 million to trigger the conversion.
“In the process of completing this transaction, we may choose to convert,” says Greczyn, who emphasizes that Blue Cross’ board first would have to decide whether to convert.
Before converting, says Brad Wilson, senior vice president and general counsel for Blue Cross, the insurer would need to agree with Attorney General Roy Cooper and Insurance Commissioner Jim Long on how to work with the foundation in handling the sale of stock, selection of Blue Cross board members and other business details.
Cooper would name the foundation’s 11 members – none representing Blue Cross — based on 22 nominees recommended by an advisory panel of 11 members appointed by specific business, nonprofit, educational and health-care groups.
Pam Silberman, associate director for policy and analysis at the Sheps Center for Health Services Research at the University of North Carolina at Chapel Hill, says the board, following the lead of foundations created through conversions in other states, might study critical health-care needs in the state before setting grantmaking priorities.
Key issues needing study, she says, include documentation of the number of uninsured people in the state, and disparities in access to health care.
Tom Ricketts, deputy director of the Sheps Center, says research also is needed to pave the way for better coordinating care provided by free clinics and government-supported programs.
Searing says the foundation’s top priorities should include dental care for children and adults, and prescription drug assistance for people with disabilities and older people.