Marketing Principles at Carefirst Bluecross Blueshield

Marketing Principles Incorporated at CareFirst BlueCross BlueShield

Andrй R. Lynch

MGMT 3002- Principles of Marketing

January 15, 2005

Walden University

Dr. James Skertich

Abstract

Sam Walton, the founder of Wal-Mart, began looking globally for imports back in the 1970's. As the Wal-Mart chain grew through the advantages of computerized supply chains, they were able to become the largest of all the world's companies. This whitepaper analyzes Wal-Mart's effectiveness in regional markets around the world and reactions/responses of Wal-Mart due to those different market conditions.

Table of Contents

Introduction 4

North American Wal-Mart Stores 5

The Case in Germany 6

Japan Expansion 7

Recommendations 8

Final Conclusions 9

Bibliography 11

Marketing Principles incorporated at CareFirst

Introduction and Background Information

CareFirst, Inc. is the not-for-profit, non-stock, parent company of CareFirst of Maryland, Inc. and Group Hospitalization and Medical Services, Inc., affiliates that do business as CareFirst BlueCross BlueShield. A third affiliate does business as Blue Cross Blue Shield of Delaware. CareFirst, Inc. is governed by a Board of Directors and special statutes regulating its business in Maryland, the District of Columbia, Delaware and Northern Virginia.

Is the largest health care insurer in the Mid-Atlantic region, serving more than 3.2 million members

Has more than 6,200 employees in Delaware, District of Columbia, Maryland, North Carolina, Northern Virginia and West Virginia

Includes more than 80 percent of all of the Maryland/D.C./Delaware/Northern Virginia region's health care providers as participating in one or more of its provider networks

Offers self-insured employers administrative services through its third party administrator

Has received seven consecutive national Brand Excellence awards, recognizing its customer service, financial strength, membership growth and promotion of the Blue brand name

Received "Commendable" ratings from the National Committee for Quality Assurance (NCQA) for its HMO

Operates a for-profit regional HMO subsidiary - CareFirst BlueChoice-that is a licensee of the Blue Cross and Blue Shield Association. HMO features more than 3,500 primary care physicians

Is affiliated with 165 hospitals in Maryland, D.C., Northern Virginia and Delaware

Serves about 515,000 members in the Federal Employees Health Program - largest FEP enrollment in the nation

Operates a subsidiary based in Charleston, WV, that annually processes more than 5 million claims for federal government subscribers and dependents as part of the Federal Employee Health Program

The mission of CareFirst BlueCross BlueShield is to provide health benefit services of value to customers across the region comprised of Maryland, Delaware, and the National Capital Area. To fulfill this mission, CareFirst BlueCross BlueShield commits to:

Offer a broad array of quality, innovative insurance plans and administrative services that are affordable and accessible to our customers;

Fairly address the needs of customers in each of the jurisdictions in which we operate;

Conduct business responsibly as a non-profit health service plan, to ensure the plan's long-term financial viability and growth;

Collaborate with the community to advance health care effectiveness and quality;

Support public and private efforts to meet needs of persons lacking health insurance;

Foster health systems integration and health care cost containment to benefit the people in areas we serve, and

Promote respect, fairness and opportunity for our associates. (www.carefirst.com). Although CareFirst offers a wide range of products and services, customers and leaders in heathcare alike have been forced to look backward at the company's attempt to become a for profit company. Seven months after Maryland insurance regulators quashed Jews' plan to sell CareFirst BlueCross BlueShield to a for-profit California insurer, the prominent and embattled businessman still runs the region's largest health insurer.

In fact, each of the eight CareFirst executives who would have shared almost $120 million in bonuses had the company sold to WellPoint Health Networks Inc. -- Jews would have reaped about $40 million of that sum -- remain with the company.

That leaves some wondering, and others openly doubting, whether the company can truly move forward.

"[Jews] has contributed a great deal to the company, and he may have been exactly what we needed when he was hired," said Del. Shane Pendergrass, a Howard County Democrat and supporter of bills passed in April that reform Owings Mills-based CareFirst. "If I were on the board, I'd be looking for new leadership."

As a new nine-member state committee created to select 12 new members to CareFirst's board begins its work, lawmakers and other key officials still clearly have their doubts about Jews and other top CareFirst managers. Though few critics doubt Jews' business acumen, they wonder if he and CareFirst's other top executives are the right leaders for a company that needs to overhaul its reputation, which has been damaged by two years of controversial conversion and sale talks and a recent federal investigation.

"To this point, they have not demonstrated that they have in fact moved away from their business decision, made many years ago, to go for for-profit status," said Del. John Hurson, a Montgomery County Democrat and one of the company's leading critics during the