IBM (NYSE: IBM) and Blue Cross Blue Shield of Massachusetts (BCBSMA) today announced a new five-year services agreement in which IBM will work with BCBSMA to transform the organization’s information technology (IT) environment into a more responsive, competitive and flexible IT delivery model. IBM’s solution is aligned to BCBSMA’s new IT Operating Model that redefines all aspects of IT activities – from strategy and planning, through delivery of solutions and operations. This new model will enable BCBSMA to more effectively deliver and support IT solutions in alignment with the company and industry changes, and to generate expected savings of approximately $16 million annually.

IBM’s plan to optimize the technology environment for BCBSMA includes end-user technical support for employees and management of the organization’s data center operations and applications portfolio to enhance the organization’s IT operational processes. Additionally, IBM will host BCBSMA’s external Web site, bluecrossma.com, enabling its nearly three million members fast and more secure online access to claims and general health care information. The new agreement offers BCBSMA a technology environment that can respond to the rapid changes and growth in health care.

“We are changing the methods in which we make decisions on where and how to invest in technology for the benefit of our members and accounts,” said Bill Fandrich, chief information officer, Blue Cross Blue Shield of Massachusetts. “IBM has demonstrated it has the capabilities, skilled workforce and shared vision in health care technology services to provide the model we need to optimize and better manage the key infrastructure and core processing systems that are the engines of our business.”

“As health care companies undertake aggressive efforts to improve their cost structure, IBM is in a unique position to help BCBSMA achieve greater flexibility and control of its service offerings,” said Brian Whitfield, general manager, public sector, IBM Global Technology Services. “With a modernized IT environment, BCBSMA and its members will realize a significant improvement in health care management.”

Today’s announcement builds on the work the two companies started in January 2010 when BCBSMA and IBM collaborated to create a new online experience for its customers. IBM participated in the development of a new portal to provide members with easier entry into BCBSMA’s Web site and secure access to personalized plan information. The new contract was signed in June 2010.

About IBM:

For more information about IBM, please visit www.ibm.com/services.

About Blue Cross Blue Shield of Massachusetts:

Blue Cross Blue Shield of Massachusetts (www.bluecrossma.com) was founded 73 years ago by a group of community-minded business leaders. Today, headquartered in Boston, BCBSMA provides coverage to nearly 3 million members, 2.5 million in Massachusetts. BCBSMA believes in rewarding doctors and hospitals for delivering safe and effective care, and in empowering patients to take more responsibility, become educated health care consumers, and become stronger partners with their doctors. Blue Cross Blue Shield of Massachusetts is an independent licensee of the Blue Cross Blue Shield Association.