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Wellpoint Buys CareMore Health Group and Why You Should Care

LA Times: "Cerritos healthcare provider CareMore Health Group is being acquired by health insurance giant WellPoint Inc. for about $800 million as part of an effort to bolster the insurer's profile in senior care as baby boomers age."

Like with the Humana-Concentra deal, insurers have a vision for value-driven health care that's quite different from most hospitals' 'let's avoid it until Medicare sweetens the pot' posture.
"The deal, announced Wednesday, will give WellPoint a boost as it competes for a piece of the fast-growing elderly care market, said Ana Gupte, an analyst with New York research firm Sanford C. Bernstein.

"They've purchased a company that has a strong record of managing chronic disease and clinics that specialize in caring for seniors," Gupte said."
Hospitals are in full-blown dither mode about ACOs.  Should we or shouldn't we?  Now? Next year? Never?  Ever?  Some caution is probably appropriate at this point.  Still, it bears watching as insurers' own diversification plans become clearer and they move closer to becoming full-blown competitors.

Insurers are looking at a range of options:
  • Selling IT services to ACOs.  (I.e. They're our vendor.)
  • Contracting to run ACO's back-end operations - underwriting, claims, plan administration, etc. (I.e. they're our partner.)
  • Becoming their own full-blown ACO-like organization.  (I.e. they're our competitor.)
Example: With Concentra, Humana now has clinics in 40 states and 1,000 employed primary care docs clustered in geographies where Humana has a large presence. They could easily morph into something resembling an ACO, using existing hospital and specialist contracts for a ready-made, low-cost network.

Is it possible that hospitals and physicians are in for a replay of 1990's style, bottom-of-the-food-chain managed care environment?  A time when insurers drove contracted rates and utilization as low as possible, keeping the risk and the savings for themselves? They've certainly broken out to an early lead, with deep capital pockets and superior information gathering and analysis skills.

AND their information systems offer an end-to-end, 'across the continuum' view of health spending and utilization, not just the doctor and hospital silos we're used to working with.

If there's value to be gained, be assured that insurers will find a way to reserve most of it for themselves!  So dither away!

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