Indiana Insurance

L. Ben Lytle, whose Anthem Inc. acquired Blue Cross Blue Shield of New Jersey, apparently there are figures, one thing is certain for America is rapidly changing health system: You have too thick a player.

Under the leadership of Mr. Lytle, 49, a native of Texas, who once verschlafene mutual insurance company which jaillie its roots under the Blue Cross Blue Shield business in Indiana in a $ 6 billion health care company - as diverse as competitors a Customers can make subsidiaries or suppliers of another. Fortune Magazine, the company occupies the nation as the biggest turnover of 217 in the year 1995.

Known during the past year, given the relevant insurance policies, the anthem of Kentucky acquired Blue Cross Blue Shield similar cases, if the mutual insurance South-East society during the years 1992 and added that the license for the use of the Blue Cross and Blue Shield Brands in Ohio during the last year, it is merged with the Community mutual insurance company.

With the Anthem name of health, but also sold a large number of workers health and benefit plans for 1.75 million people of New York, New Jersey, California, Florida, Texas, West Virginia and Georgia.

But Anthem also sells life, property and auto insurance, leading networks of primary care physicians and specialists; renounces mail-order drugs, Medicare and manages applications for other activities.

What is the impact of these pieces together? It’s not easy for outsiders to tell.

In his 1992 book “Liberation Management, Tom Peters, the commentator on business strategy, Mr. Lytle lionized as one of the main practitioners of decentralization. Peters welcomed these concepts for its rapid response litheness the competition, but Mr. Lytle east of the border strategy.

“I do not think the prescription, we followed is good for all businesses,” said Lytle Indiana Business Magazine. “If the nature of the Chairman of Board of Directors or Senior Manager, you really nervous, if you do not know exactly what happens, we can not survive in a decentralized environment.

Wall Street has an imperfect vision, although Mr. Lytle strategy works, since only a portion of the anthem, its Acordia Inc. insurance brokerage, has a public shareholders. Fortune estimated that Anthem had a net loss of $ 98 million in 1995. But most of the shares in the insurance sector, the anthem is the market leader for performance and Blue Cross Blue Shield operators.

Acordia, partners have developed health insurance’s marketing department, was built as an area during the years 1989 and received a share of $ 14.50 during the year 1992. Participation maintain a percentage of 60 shares.

Acordia height of the first collection of profits from the sale of insurance plans to specific groups such as teachers and mid-sized markets held only under the radar of industry giants. Whenever a local office has increased by more than 100 employees, Mr. Lytle would it keep the organization to submit aggressiveness and intimacy of a small business.

In the case of associated countries, has acquired health plans, Acordia bid for the rights of marketing and managing claims and other administrative functions. Acordia received two missions of the South Eastern. So far, he has won only offer for sale in the Commonwealth each other.

Wall Street is whether Acordia’s Anthem bond to help actually, because the affairs of its sister company has violated the profits. Participation of health plans can be exasperated have a good deal, but Acordia’s margins - only 8 percent before taxes last year - are the lowest of all major brokers.

Last year, with Acordia share Tumbeln in the centre-20’s, the anthem has said he would buy more than one million shares, its stake would have been higher by almost 70 per cent. Anthem has acquired so far, only 100000 shares, but Acordia share price has rebounded strongly. The shares closed 12.5 cents to $ 31.75 yesterday in New York Stock Exchange under the trading near the camp of 52 weeks in full.

“It remains to be seen whether Acordia can be quite brings additional revenue in the long term will become low-margin,” said Joann Smith, follows the assurance of Fox-Pitt, Kelton.