Who: Blue Shield of California (BSC), based in San Francisco, acquires CareAmerica Health Plans (CA), based in Woodland Hills, Calif. This is the first time a for-profit health plan has transitioned into a non-profit plan, Blue Shield says.
When: The Department of Corporations, a regulating body, gave its approval July 8.
Staff Implications: Because BSC is acquiring CA its communications staff remained intact. But CA's communications staff was downsized to four from nine, largely because the public affairs department had to move to BSC headquarters in San Francisco and the department had a high rate of duplication.
Company-wide, the layoffs have been conservative, about 100 out of 3,000.
Effect on PR/Marketing: When CareAmerica's parent company, Unihealth in Burbank, Calif., announced that it was selling the for-profit health plan two years ago, a merger communications framework was initiated.
Ross Goldberg, CA's senior VP of communications and marketing, took a "template-style" approach to the transaction by conducting the preliminary leg work, even though he didn't know what company would be buying CA.
The initial plans involved identifying and developing communications messages for 19 audiences who would be affected by the merger news, including health plan members, physicians, brokers and employees.
"[Care America] was in a unique situation. We weren't the buyer nor were we the seller, so we couldn't take a real proactive [communications] role," says Goldberg. "But it was important to identify responsibilities early on so that we could concentrate on strategy and enhance specific messages when information on the buyer became available."
By February 1997, during the due-diligence phase of the negotiations between CA and BS, Goldberg's PR team assembled a binder with template memos, talking points, press releases and newsletter articles. Blue Shield's management, including its CEO, was so impressed with the information that the approach shaped the two health plans' strategy for merger communications, says Goldberg.
Acquisition Campaign: In July 1997 BSC and CA launched 10 steering committees, including communications, human resources, finance and provider relations to create a smooth transition.
The five-member communications committee, headed by Goldberg, is comprised of three BSC staffers and two CA staffers. Although employees complained that there weren't enough details provided about the transaction, the communications effort helped to establish internal credibility, says Thomas Gwyn, BSC's VP of public affairs, who sat on the steering committee.
The team's projects included:
- Conducting market research into other merger campaigns and assigning liaisons with the other nine teams. The team found that providers and brokers often feel excluded during a merger.
To overcome this communications barrier, the BSC-CA team developed targeted messages for the providers and brokers that would be most affected by the acquisition.
- Assigning communications liaisons to the other nine steering committees. This helped keep all employees in the loop on various aspects of the transaction from provider relations issues to human resources updates.
- Managing the media so reporters were getting consistent messages from the two organizations. The media hook was the transaction as the first for-profit to non-profit health plan transaction. (BSC, Thomas Gwyn, 415/229-5110; CA, Ross Goldberg, 818/228-4444)
M & A Search
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