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BLUE CROSS AND BLUE SHIELD, DELTA DENTAL ANNOUNCE JOINT OPERATING AGREEMENT

 BLUE CROSS AND BLUE SHIELD, DELTA DENTAL
 ANNOUNCE JOINT OPERATING AGREEMENT


State's Leading Health and Dental Coverage Carriers Create Strategic
 Partnership to Meet Marketplace Demands
 ST. PAUL, Minn., Aug. 3 /PRNewswire/ -- Blue Cross and Blue Shield of Minnesota (BCBSM) and Delta Dental Plan of Minnesota -- two of the state's leading health care management companies -- today announced they will begin working as partners through a new joint operating agreement effective January 1, 1993.
 The partnership, among the first of its kind between a Blue Cross and Blue Shield and Delta Dental plan, will present new product development, marketing and program administration opportunities for both companies. In addition, the affiliation will better position both companies to provide combined health and dental products and services to local, regional and national purchasers of employee benefit programs.
 Under the agreement, both companies will remain independent, nonprofit corporate entities with their own boards, officers and governing structures. However, operations, marketing and sales, and administrative services will be combined.
 "Our clients will benefit directly from our ability to develop new health and dental benefit programs featuring integrated cost- and quality-management capabilities," said Andy Czajkowski, BCBSM president and CEO. "Such a partnership gives us added flexibility to excel in a rapidly changing health care environment."
 Said Mike Walsh, president and CEO of Delta Dental Plan of Minnesota: "This partnership is a natural and powerful affiliation. Working together, we can use our combined expertise to develop innovative managed care products, reduce administrative expenditures and realize new operating efficiencies."
 Serving 1.7 million Minnesotans, BCBSM is the state's largest and oldest health coverage carrier. The company offers a full complement of employee benefit products, including dental benefit plans. Currently, BCBSM markets three dental plans: MII Dental, a fee-for-service plan; Dental AWARE, a preferred provider organization (PPO) plan; and MORE Dental, a capitated, managed care plan. At the end of 1991, combined enrollment in these plans was about 150,000.
 Delta Dental is Minnesota's largest dental benefits carrier and among the largest Delta Dental plans in the country. The company offers a complete line of dental products and administrative services, including a state-wide fee-for-service dental plan with more than 2,600 participating providers; Delta Choice, a preferred provider network plan with more than 600 participating providers; and Delta Advantage, a closed-panel, capitated managed care plan. At the end of 1991, total combined enrollment in these plans was nearly 900,000.
 The partnership is made stronger by the fact that both companies are in excellent financial health. In 1991, BCBSM recorded $992 million in revenues and ended the year with 3.3 months of claims and administrative expense -- or $148 million -- in free reserve. The company also was assigned a AA- (double A minus) rating from Standard and Poor's Inc., for its superior economic strength and demonstrated ability to meet subscriber obligations. Delta Dental, in the strongest financial position in its 23-year history, recorded nearly $100 million in revenues in 1991 and ended the year with $18 million in free reserve.
 Under the terms of the joint operating agreement, Delta Dental will provide administration for all dental products and services. BCBSM's dental plans and provider networks will be assumed by Delta, and the two companies will work collaboratively to develop and market new combined health and dental products and new provider networks with expanded managed care capabilities. Members currently covered by Delta Dental plans or BCBSM dental plans will not be affected by the affiliation, and they will continue to receive dental services from their current dental care providers.
 "Over the last several years, we have developed the products and administrative capabilities to meet the dental benefit needs of virtually any group purchaser. But we have lacked the health care component," said Walsh. "Now, our clients will have easy access to some of the industry's most advanced managed health care plans backed by the state's leading health coverage carrier. And BCBSM's clients will have access to similarly managed dental plans."
 The partnership also positions both companies to better service clients with national operations. Currently, BCBSM provides coverage and claims administration services for Minnesota-based businesses with operations in other states. Delta Dental Plan of Minnesota provides services to clients in Arizona, Nebraska, North Dakota and Wyoming. The company also operates Delta USA, a managed care dental benefit program with 110,000 participating providers nationwide.
 "This partnership will enable us to go to the national marketplace with significantly improved health and dental managed care capabilities," said Czajkowski. "We are confident this will create new opportunities for both companies and bring more business to Minnesota."
 -0- 8/3/92
 /CONTACT: Mark Heymans of BCBSM, 612-456-8786 or 800-382-2000, ext. 8786; or Mike Walsh of Delta Dental, 612-944-5252, ext. 305/ CO: Blue Cross and Blue Shield of Minnesota; Delta Dental Plan of
 Minnesota ST: Minnesota IN: HEA INS SU: JVN


AL -- MN013 -- 6189 08/03/92 12:59 EDT
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Publication:PR Newswire
Date:Aug 3, 1992
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