DOUBLE INDEMNITY.

• Author: Gray, Tim
• Position: Statistical Data Included

At Healthsource, Bob Greczyn built the state's biggest HMO. Can he remodel Blue Cross into a sleek managed-care provider?

Bob Greczyn strains against the steering wheel, fighting 750 horsepower and 3,400 pounds. At 120 mph, the Chevy Monte Carlo wants to dive to the bottom of Lowe's Motor Speedway's banked curve. He's so close to the car ahead that he can't see the asphalt between them. Another one runs abreast, 18 inches off his left side. Its nose hangs in his peripheral vision, then disappears. The car spins into his rear view, slamming into two running just off his tail. Sparks flash as all three pinwheel, finally crumpling against the wall. The yellow caution flag comes down, and Greczyn and two other drivers head for the pits. They're not racing but learning to race at the speedway's advanced driving course.

For Greczyn, who used to fly airplanes and gliders, this is for kicks. His job as president and chief operating officer of Blue Cross and Blue Shield of North Carolina -- he'll become CEO in April -- never gets so harrowing. But in its own way, it's tense, with danger aplenty. Running Blue Cross, or any health-insurance company, means balancing the demands of prima donna doctors, premium-shocked employers and prickly members. Doctors want more money and autonomy. Employers, an end to double-digit rate hikes. And members, Nordstrom care at Wal-Mart prices.

Blue Cross itself is like an old race car with a mammoth engine -- its 1.9 million members give it the state's biggest market share -- but a squirrelly suspension. Organized 67 years ago as a nonprofit insurer of last resort, it long operated like a public utility, paying scant attention to costs, customers or competition.

Greczyn's predecessor, Ken Otis, started the shift from old-style indemnity insurer to managed-care company after he arrived in 1994. But with every advance, he alienated someone. In 1996, he irked physicians by ditching two of the three docs on the board. In '97 and '98, he pushed a proposal in the General Assembly that would let Blue Cross convert to a for-profit company. He billed it as a noncontroversial, just-in-case measure. Lawmakers balked, demanding that the insurer pay back the subsidies it had received through a state tax break. If Blue Cross converts, an independent charitable foundation will be created and get "100% of the value of the company in stock," according to the law that was eventually passed.

What Otis started, Greczyn must tweak and tune before competitors such as Philadelphia-based Cigna Corp. and Minneapolis-based United Health Group go roaring by. One way he plans to do it is by showing doctors he's on their side. As Bob Seligson, head of the North Carolina Medical Society, puts it, "He wants to be the least-hated CEO of a managed-care company in North Carolina." Within six months of joining Blue Cross in 1998, Greczyn was barnstorming the state. His message to physicians: Tell me what we can do to improve relations. Not everybody is buying it. Says one doctor, "He's a wolf in sheep's clothing."

Greczyn knows the managed-care market in this state as well as, maybe better than, anybody in the industry. He has a decade as a chief executive behind him, building Healthsource North Carolina Inc. into the state's biggest health-maintenance organization before its parent was bought by Cigna in 1997. But he's never run a company as large as Blue Cross. Nor has he had to take one through the transition from lumbering monster truck to lean, nimble Indy car.

Greczyn's resume shows few of the usual filigrees of a Tar...