Blue Cross Blue Shield of Massachusetts
| Company type | Nonprofit |
|---|---|
| Industry | Health insurance |
| Founded | 1988 |
| Headquarters | Boston , United States |
Key people | Andrew Dreyfus (former CEO) |
| Products | Health insurance plans |
| Website | www |
Blue Cross Blue Shield of Massachusetts (BCBSMA) operates as a nonprofit, state-authorized private health insurance provider affiliated with the Blue Cross Blue Shield Association, with its main office located in Boston.
History
Formed in 1988 by merging Blue Cross and Blue Shield of Massachusetts, BCBSMA launched an HMO offering in 1992 during the expansion of managed care throughout the 1990s.
As a nonprofit insurer, BCBSMA covers approximately 2.8 million members, maintaining the dominant market share within Massachusetts, largely through employer-sponsored insurance plans. Early 2011 saw a modest decline in membership due to economic challenges.
In 2010, outgoing CEO Cleve Killingsworth received $8.6 million as parting compensation, which led to public criticism and prompted an inquiry by the Massachusetts Attorney General. Subsequently, the company returned $4.2 million of that amount to policyholders, resulting in premium reductions averaging about $3 per member.
On January 20, 2022, Andrew Dreyfus announced his departure as CEO after serving in that role for 12 years.
Alternative quality contracts and reform
BCBSMA became notable for pioneering its alternative quality contract (AQC) payment system. In 2007, then-CEO Cleve Killingsworth mandated a six-month timeline to create a new reimbursement approach for healthcare providers aimed at eliminating unnecessary expenditures that failed to enhance patient care. The AQC model launched in January 2009 as a global payment alternative to the traditional fee-for-service structure, which often incentivizes excessive procedures.
The AQC framework promotes greater provider responsibility by blending capitation payments with performance-based bonuses tied to patient care quality, thereby discouraging underperformance. Internally, the term "capitation" was avoided due to its negative reputation from managed care experiences in the 1990s. Under this model, groups of physicians and hospitals receive fixed payments intended to encourage coordinated patient management. In its initial year, AQCs achieved reductions in medical spending among participating providers, although incentive payouts partially offset these savings. By October 2011, roughly 613,000 BCBSMA members—representing two-thirds of those enrolled in health maintenance organizations—were covered by AQCs; however, preferred provider organization members were excluded from this model.
The rollout of AQCs stimulated discussions among state legislators regarding payment reform and generated wider interest across the healthcare sector. Providers also aimed to show their backing for broader health reform efforts. In 2011, major healthcare system Partners HealthCare joined the AQC program, agreeing to lower reimbursements potentially as a strategy to avoid stricter regulatory cost controls.
Marketing
In March 2018, Blue Cross Blue Shield of Massachusetts entered into a six-year marketing agreement with the city-owned bikeshare service, resulting in its rebranding as Bluebikes. This partnership included expanding the bike fleet and installing branded stations. The sponsorship was renewed through 2031 in 2023, with plans to introduce electric bicycles to improve the service offering.
See also
External links
- Articles with short description
- American companies founded in 1988
- Boston-based companies
- Financial services firms established in 1988
- Health insurance providers in the United States
- Insurance firms headquartered in Massachusetts
- Medical and health institutions located in Massachusetts
- Blue Cross Blue Shield Association affiliates
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- Companies of the United States by year of establishment
- American companies established in 1988