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Banks entering the health savings account market must cope with some barriers to entry- including the steep early-mover advantage of established competitors BY GLEN FEST
Nearly three months after putting its Blue Healthcare Bank operation on the block, the Blue Cross Blue Shield Association was still looking for takers in December.
Maybe its a sign the struggling institution has little to oner a buyer. At the end of September, the specialty consumer-directed healthcare bank's deposit base had fallen to $24 million, far below the 2010 target of $500 million bank president Robert Gross set shortly after the bank opened in 2007. "To sell the bank itself, it's not worth a whole lot," says Cèlent senior analyst Red Gillen.
It may also indicate dim prospects for any new entry in the nascent market of health savings accounts. Just six years after the 2003 Medicare Modernization Act formally created the HSA, the industry has become well entrenched...