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Insurance Merger Could Result in Philadelphia Job Losses
By carpenjl | August 27, 2008
A merger between two large Pennsylvania insurance companies could result in Philadelphia job cuts.
Independence Blue Cross, located in Philadelphia, is considering a merger with Pittsburgh-based Highmark Inc. According to an article by Philly.com, the merger would create the largest health insurer in the state, but would also lead to between 745 and 1,200 job cuts.
It is not known yet which jobs would be affected. However, a report by Booz Allen Hamilton, the company’s consultant, states the biggest cuts would come in information technology, where 383 to 461 positions would be eliminated. This is the area where the two companies report their lowest turnover, 5 percent for Independence Blue Cross and 3 percent for Highmark.
Other positions that could be cut include: back-office functions, such as claims processing at 162 to 366 jobs; corporate services and procurement at 113 to 192 jobs; front-office jobs, including sales, marketing and underwriting at 47 to 108 jobs and middle-office jobs in network, medical and disease management at 40 to 80 jobs.Blue Cross says the merger and job cuts would save $1 billion over six years. It also is noted Blue Cross’ prescription management program, FutureScripts, could be a potential growth area.
Independence Blue Cross recently cut 54 jobs, including six enrollment quality data analysts, eight enrollment specialists and two enrollment supervisors. The company currently employs 9,119 people, 7,939 in Pennsylvania. Highmark employs 18,500 employees, 10,500 in Pennsylvania, and has not cut jobs since 2002.
“Doing widespread layoffs is not who we are, and it’s not how we do business,” Elizabeth Williams, Blue Cross’ spokesperson, said in the article, describing the job changes as company responses to changes in technology and procedures driven by customer demand. “Business owners are asking for more sophisticated analysis of their medical costs. To do that, we need new equipment, and we need to change staffing.”
The company usually gives employees who are about to be laid off two months to look for other jobs within the company and Blue Cross offers counseling and coaching for those who cannot find other work.
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