Conversion foes: it's our Blue Cross to bear.

• Author: Cline, Ned
• Position: Capital - Blue Cross and Blue Shield of North Carolina

Despite spending $18 million in 18 months trying to win conversion to a for-profit company, Blue Cross and Blue Shield of North Carolina still lost. Well, it didn't exactly lose. Realizing it couldn't win on its own terms, it quit before the game was over, forfeiting all the time, energy and money it spent on the effort. Maybe it's another symptom of a health-care system that's anything but healthy. As costs soar, options shrink and accountants rather than doctors decide what services are delivered, many people fear any change will be for the worse.

But there's more to this story than that. The untold part is what went on behind the scenes. Opponents, forecasting staggering premium increases and hefty payouts to insiders, feared they might lose if the decision were left solely to politicians and Blue Cross' marketing budget. So several dozen groups--initially led by the North Carolina Association of Community Pharmacists and with virtually no political muscle of their own--devised a strategy that was risky but proved wise: They used the state's biggest health insurer's bigness against itself.

They hired two consultants identified with the polar extremes of Tar Heel politics--one best known for his work with Jesse Helms, the other as one of Jim Hunt's closest advisers--to wrest control of the debate from the power brokers and shift its focus. "We wanted to get the fight out of the legislature and into the public arena," says Carter Wrenn, who over two decades devised strategy for Helms, the Republican five-term senator. "Blue Cross is a powerful lobbyist with public officials. But public opinion is a risk for politicians, and we just felt if we could get the public to understand what was behind conversion we would do all right." What was behind it, as the opponents shaped the debate, were higher health-care costs and higher pay for executives.

"There was discussion about not wanting Blue Cross to become 'Enronized,'" says Gary Pearce, a top aide to Hunt, the Democratic four-term governor. But that's what the opposition tried to do, branding Blue Cross as just another example of corporate greed. "We focused on wanting to minimize rates and maximize health care," Pearce adds.

Wrenn and Pearce project themselves as "aw shucks" novices, but their shrewdness showed, considering Blue Cross outspent their side 18-1. State Insurance Commissioner Jim Long had to appear impartial, but he feared the fallout come election time if, as opponents warned...