Health Insurance Business Under the Radar With Tiered Subsidiaries–Where All the Action Takes Place With Mergers, Acquisi
Posted Jul 03 2013 2:29pm
In the news today in the OC we have news with MemorialCare Medical Foundation buying into SimonMed imaging with owning over 50% (controlling interest) with yet one more “new” subsidiary called “Wave Imaging, LLC” This is moving quite fast as it was just in 2011 that the announcement was made that Optum, a subsidiary of United Health Group purchased Memorial IPA, which is now the MemorialCare Medical Foundation a not for profit company still? Hmmm….so now there’s a big stake and investment here with imaging centers.
There’s also some investing and ownership with with surgical centers . We are all aware of hospital systems buying up surgical centers and there’s also insurance company subsidiary action here too. Via the MemorialCare subsidiary of Optum, the subsidiary of United HealthGroup created a new venture or subsidiary called Beach Surgical Holdings, LLC in February of 2013 .
“Beach was created in February when the foundation entered a joint venture with Birmingham, Ala.-based Surgical Care Affiliates LLC.”
Monarch Healthcare, one more Optum tiered subsidiary the article stated was involved here, and well, remember this story…
In April the Non profit MemorialCare subsidiary of Optum, tiered subsidiary of United HealthGroup bought a 51% (controlling interest) of a specialty practice in Laguna Hills, California, Digestive Disease Center. The center is affiliated Saddleback Medical Group .
So whether it’s an imaging service or gastrointestinal services you need, a cut goes to the big conglomerate in one way or another be it cash or otherwise.. Again I’m not a legal expert but having a not for profit division of a for profit big insurance company can surely lead to questions I think. How does that work? We do know there are tax break benefits in here and the ability to secure grants.Not-for-profit is gaining ground because it more accurately reflects how these organizations work they say.
Most nonprofit/not-for-profit organizations do make profits. It’s just that the profits are reinvested into company operations. Ok so where do the profits get reinvested? Can we tell? Does one subsidiary benefit or suffer from the profits or losses of the other? I guess we have one big “tiered mysterious not for profit group” Again when SEC listings come in to play..how does the “not for profit” exemption play? So when a patient visits an imaging center that is 51% owned by the not for profit subsidiary of a subsidiary that is for profit, where do the dollars go?
Do take a look at the official SEC listing if you don’t believe that all the action is happening with subsidiaries today. Maybe this is why there was no need to participate in the California exchange, they have enough money and the business intelligence algorithms and models they use state that the profit yield from issuing policies doesn’t have a high enough yield and they don’t want the “risk “ exposure? This decision is not under the radar as it relates to selling policies, what most think is all health insurers do, not the case with all the mergers, acquisitions and business intelligence models built. Government can’t keep up with this and end up behind the 8 ball sadly.
"We are looking forward to further expanding our Digestive Disease Center relationship with Monarch gastroenterologists though this collaboration with MemorialCare Medical Foundation," says Bart Asner, M.D., CEO of Monarch HealthCare. "This offers an excellent opportunity to broaden our outpatient capabilities to achieve better care, lower cost and a superior experience for patients."
As I have read the subsidiary of Optum, LHI was originally created years ago to be a government contract vendor with a former director of HHS on staff at the time. He’s no longer there and I would guess that change took place when the Optum subsidiary bought the company. The LHI subsidiary in the United group does VA exams and big DOD occupational health events. Information quote from the website below…
“We have administered private occupational health services in support of various federal agencies including the Centers for Disease Control and Prevention (CDC), Federal Occupational Health Service (FOHS), Department of Defense (DoD) and the Veterans Health Administration (VHA). We support a wide variety of customers, including: National Institute for Occupational Safety and Health (NIOSH), U.S. Army Medical Command (MEDCOM), the Army Reserve, Army National Guard, Air Force Reserve, Air National Guard, Army Dental Command, Navy Reserve, Army Corps of Engineers, Coast Guard, Military Sealift Command and other Federal agencies. LHI also supports a number of private sector clients with occupational health services, including four of the Class 1 railroads operating in the United States.”
One does have to wonder how all the subsidiaries function and where and when interactions with others take place, how do you keep it all straight and what data sharing capabilities are there? Could one share or sell to the other sub? We don’t’ know any of this but with complexities you can’t rule anything out today without researching it.
Or these posts from the archives…it’s all about the models and nobody has been looking for a lot of accountability with math…is it because of all this physical pain (real scientific study) it creates (grin). It’s all about the models, not the data …BD