Kentucky Blues plan to hike premiums, cut doctor pay. (Anthem Blue Cross and Blue Shield)(Special Report: Health Care Quarterly)

Managed care plans stumble in state's regulatory environment

Blue Cross of Western Pennsylvania isn't the only Blue Cross plan with the financial blues these days.

Anthem Blue Cross and Blue Shield, for example, is embarking on an effort to save $20 million in expenses annually in Kentucky.

The Anthem Blues, which cover 1 million Kentucky residents, are a subsidiary of Indianapolis-based Anthem Inc.

Alliea Phipps, the company's project manager for media and community relations, said Anthem intended to institute cost cuts eventually, but the company is doing so now because of its financial situation.

Anthem's cost-saving measures include:

* signing contracts with fewer pharmacies;

* signing contracts with fewer laboratories;

* signing a contract with a single company to provide …