Arkansas Blue Cross & Blue Shield Agrees to Partnership with Cambia 

Curtis Barnett, president and CEO of Arkansas Blue Cross & Blue Shield (Karen E. Segrave)

Arkansas Blue Cross & Blue Shield said Thursday that it will partner with Cambia Health Solutions of Portland, Oregon, in a “strategic affiliation,” allowing Cambia to manage and operate the Little Rock nonprofit health insurer.

ABCBS CEO Curtis Barnett told Arkansas Business that “basically, we’re entering into a contract with them [to] provide administrative management services, really all our operations.” 

After the partnership is approved by the Arkansas Insurance Department, ABCBS and Cambia will form a joint management leadership team, “which we’ll have good representation on that team,” he said. 

The agreement is subject to regulatory approval in Arkansas, which is expected to be in 2026.  

Arkansas Business first reported the talks with Cambia in January. Last week, ABCBS confirmed that it was in negotiations with the company. 

Partnership Structure

Under the partnership, the two organizations will remain independent entities but “share operations, share technology, which is a big part of this, as well as share staff as well. 

“All those resources that are so important to us, especially to be successful in the future,” said Barnett. He will continue to serve as president and CEO of ABCBS. He and the ABCBS board will work with Cambia’s leaders on strategy, growth and community engagement. 

ABCBS also will be represented on the Cambia’s holding company board, “which gives us an opportunity to engage and influence your priorities at that level,” he said. 

“This affiliation brings together two organizations with a shared purpose: to be a catalyst for transforming health care,” Jared Short, president and CEO of Cambia, said in the news release announcing the partnership Thursday. “By combining our strengths, we are expanding our ability to innovate for our customers, developing new solutions that make care simpler, more accessible, affordable and centered on the people we serve.”

Barnett declined to say how much the partnership is expected to save ABCBS. 

Cambia, a nonprofit, will receive a fee based on the services it provides ABCBS.

Motivation for the Deal

ABCBC decided to work with Cambia because of the rising costs of health care services. 

The partnership comes at a time when a number of health insurance companies have been struggling financially. 

ABCBS, citing a rise in health care costs, reported a loss of $226.2 million for 2024, compared with net income of $13.2 million in 2023. The company attributed the loss to a rising number of medical services for its members and higher costs for outpatient surgery and hospital services. In addition, ABCBS has seen an increase in “high-dollar” claims and prescription drug costs for weight-loss medications, cancer drugs and other specialty medicines. 

ABCBS projects to be close to breaking even for 2025.  

Barnett told Arkansas Business that by working with Cambia the “math works in terms of administrative cost, and being able to spread that out over more lives.”

ABCBS serves more than 1.9 million people and Cambia serves more than 3.6 million through its regional health plans in Oregon, Idaho, Washington and Utah. 

The partnership also “gives us, we think, a much better opportunity …  to grow in the future.”

Tech, Scale and Stability

Barnett said health care is becoming more complex with cell and gene therapy, specialty medications and biopharmacy. 

Cambia has the “analytics and the expertise to be able to say, OK, what is appropriate in this case? So what’s the cost effective in that case?” Barnett said. “And we think that’s where the biggest impact is going to be.”

ABCBS has 3,200 employees and Barnett isn’t anticipating any layoff as a result of the partnership. 

It also isn’t planning on eliminating any insurance lines. 

“It’s really the opposite of that,” Barnett said. “We’re hoping that through this affiliation and access to more scale, more resources, it’ll either keep us in current product lines longer and maybe even more competitive into the future.”

ABCBS will remain in Arkansas and be regulated by the Arkansas Insurance Department. 

Its policyholders will keep their ID cards, provider networks and their existing coverage.

Cambia is expected to improve policyholders’ customer experience. Cambia is a leader in technology, “especially technology as it relates to consumer type tools to help individuals be better purchasers of health care services and utilizers of health care services,” Barnett said. 

Cambia also has partnered with other Blue Cross Blue Shield companies. In August, Cambia and Blue Cross Blue Shield of North Dakota announced a strategic affiliation to “better serve members with access to care that’s simpler and more affordable,” according to a joint news release. “The affiliation will unify all operations and enable the organizations to share best practices for local plan innovation and services, deliver personalized member experiences and leverage Cambia’s robust technology infrastructure.” 

That partnership is also subject to regulatory approval and is expected to close in 2026. 

Since 2021, ABCBS has been working with Cambia, Blue Cross & Blue Shield of North Carolina and BlueCross BlueShield of Tennessee as part of the Echo Innovation Alliance, which was formed to support the development of innovative products and services to improve health.

Founded in 1948, ABCBS is one of Arkansas largest private companies based on revenue and one of its most iconic companies. 

“We’re proud of the impact and the role that we play, both in the business as well as in just our overall communities, and we want to maintain that going forward,” Barnett said. “But when you look at some of the headwinds that our industry faces, some of those challenges, we feel like having a partnership that really helps both organizations bring more resources, more expertise is going to be beneficial, and it’s going to be what’s needed.”