June 22nd, 2009

Reports the Pittsburgh Post-Gazette:

Pittsburgh health insurer Highmark Inc. is quietly dismantling one of its local subsidiaries, leaving its remaining 200-plus workers wondering who will be employed and whose roles will be changed by year’s end.

Three years ago, when Highmark acquired Employee Benefit Data Systems, it saw great growth potential for the local benefits management and processing system, and had designs for national market share.

…

But in April, just a few days after Highmark’s chief financial officer remarked upon eBDS’ strong market position, the subsidiary’s CEO Alistair Rock was unexpectedly relieved of his duties.

After that, Highmark and the Highmark Insurance Group (HMIG) began the process of absorbing the subsidiary’s operations into its own, and on May 20, it dismissed managers Mary Morrow, director of client relations and member services, and Rob Myer, director of solutions management.

“Please do not read into this decision any further,” said the memo distributed internally on May 20. “No decisions about positions at Highmark or HMIG have been made at this time. We will be open and honest about these decisions as they are made.”

…

It’s not unusual for a larger company to buy a smaller one, then shut it as a means of eliminating a competitor or absorb its functions to reduce overlap and brand confusion. But the timing of this transition is interesting, in that eBDS had just completed a multimillion-dollar renovation of its One Gateway Center offices. Also, on April 1, the company launched its long-planned health and wellness management Web site, healthstylenavigator.com; on the same day, eBDS announced a contract with TelaDoc Medical Services to provide consultations and prescriptions by phone.

Days later, the dismantling began, and Mr. Rock was gone.

Read the rest of the Post-Gazette’s detailed article.