Blue Cross parent company plans 650 job cuts

Health Care Service Corp, parent of health insurer Blue Cross Blue Shield, said Wednesday it plans to cut 650 jobs - including 239 in Illinois - over the next six months.

The company, which handles Blue Cross Blue Shield of Illinois, New Mexico, Oklahoma and Texas, said the action is, in part, due to the troubled economy, since many employers in their groups have downsized. The layoffs also are partly in anticipation of President Obama's health-care reform, since health insurers could be expected to further reduce administrative expenses to help cut the overall cost of health care, said company spokeswoman Mary Ann Schultz.

"We looked strategically at where and how we provide services, where we could combine like functions and less redundancies, and how we could enhance or make process changes or add new technologies to reduce costs," Schultz said.

Reducing the number of staff positions also will save the company about $70 million annually and prepare it for moderated growth for the last half of this year and for next year. The layoffs amount to 4 percent of the company's work force, Schultz said.

The cuts mostly will be in Illinois, Oklahoma and Texas. The most significant reductions are related to the transfer of work from a federal employee health benefits claims and customer service center in Tulsa, Okla., to the company's centralized federal employee claims and customer service center in Abilene, Texas; and the transfer of claims imaging activities in Palestine, Texas, to outside vendors that have more advanced technology already in place, she said.

Affected workers will receive severance and transition services, including training on resume writing, interviewing skills and proper networking, as well as other outplacement services as needed. The staff reductions will be completed by first quarter 2010, she said.

In addition, Schultz said that patients who are covered by Blue Cross Blue Shield plans should not worry about any impact on their services.

"These changes will be seamless to our members," she said. "Our first and foremost goal is to maintain our high level of service to our members."