Brooklyn Hospital Sells Off Its HMO To Amerigroup –They Need the Money for Health IT Updates and Pensions–All Four B
Posted Oct 28 2011 1:52am
Is this Health IT expense going to burst one day? Time will tell but we have the sale again of yet another HMO and they need the money to keep the doors open so the Medicaid HMO was sold for $85 million. In addition the state is looking to figure out how to handle the 4 Brooklyn hospitals that are in the red, fix the finances somehow or let all go bankrupts.
Smaller HMOs are being acquired by larger HMOs in the US, either than or they are being bought by insurance companies. We had one large purchase as such in Orange county California not too long ago. It’s funny how we keep hearing on the other side of the coin that Health IT companies can grow rich quickly, but look at the clients, doctors and hospitals who’s incomes are shrinking so is this possible? How long will the money last? BD
Some of the insurance companies now have a large number of Health IT subsidiaries and so with one company they cut compensation and then march in with the Health IT subsidiary to sell them more software to keep what business they have left. United with all the various subsidiaries is one carrier that fits into that scheme in many areas as they own so many Health IT firms. BD
A Brooklyn charitable hospital that's also one of New York's largest Medicaid HMO's is selling off its managed care business to a for-profit company.
Pending state approval, Lutheran Medical Center will get $85 million from the sale of Health Plus , which serves 320,000 patients on Medicaid and Medicare. CEO Wendy Goldstein said the hospital needs the money for workers' pensions, technology updates and the overall balance sheet.
"We very much needed an infusion of capital to stabilize the medical center and the whole system," Goldstein said, "and capital is very difficult to come by for safety net providers."
Lutheran is selling Health Plus to Amerigroup , a publicly traded company from Virginia that already has a small presence here. New York State Health officials regularly score Amerigroup "below average" in various categories — such as "Adults Access to Preventive Care" — often several points below Health Plus, the HMO AmeriGroup is acquiring.
Lutheran is one of several Brooklyn hospitals that is struggling to keep its doors open — though at least it’s slightly in the black.