WellPoint Buys CareMore–Senior HMO Based in California–Presently Owned By Private Equity Firms
Posted Jun 08 2011 3:45pm
It must be time to bail as we all are aware of what’s happening to the Medicare Payment structures coming down the road. Living here in Southern California I remember when Caremore was started. In various conversations I have had with IPAs I had been told by a a couple that the profits made by Caremore was due to the fact that they enrolled seniors only.
The folks at the other IPAs were of course paid at the same or similar rates as those from Caremore, but I was told that the better Medicare payments made up for the losses taken on commercial insurance carriers so their profit status was kind of at a wash and they were glad they had enough seniors in their plans to make up for the commercial insurer payments which were less.
Back in 2009 Caremore made some big IT investments to run business intelligence software for analytics for Chronic illnesses. They hooked up with Trizetto the competitor of Ingenix from United Healthcare to create all types of analytics to include their PHR which connected with HealthVault and so forth and started running audit trails again back in 2009 with using their algorithms. Here’s a little additional background at the links below.
In addition Caremore coined the word “Extensivist” as a hospitalist basically that made house calls with seniors and did a lot of the follow up in that fashion which they claimed as a solution to help keep re-admissions down. CareMore provides "talking" pill boxes that remind patients to take their medications.
The plan enrolls patients in its own disease-management programs, including one for heart failure that relies on telemonitoring and the use of wireless weight scales and hospitalists that meet or beat the 15% re-admission rate goal are in line for bonuses' to be paid. We all know hospitalists and their coding are the key gatekeepers these days.
Not too long ago another big IPA, Memorial Healthcare was bought by United Healthcare, so we are seeing some trending here with insurers buying up IPAs (independent physician associations) and HMOs.
As you can see the price of $800 million was nothing to sneeze at and it will be interesting to see how this all comes under the over all WellPoint umbrella as of course data will be combined at some point for greater data analysis as that’s what they all do today. I wonder too how many of CareMore representatives will stay employed as they seemed to have quite a few of them around, at least in southern California you run into them quite often. BD
(Reuters) - WellPoint Inc ( WLP.N ) plans to buy privately held Medicare specialist CareMore to expand its presence in the U.S. government program for the elderly.
The deal advances WellPoint's plans to become a bigger competitor in Medicare, rivaling leaders UnitedHealth Group Inc ( UNH.N ) and Humana Inc ( HUM.N ), as it seeks to take advantage of the post-war baby boom generation becoming eligible for the program.
WellPoint did not announce the price, but The New York Times said it was about $800 million, citing unnamed sources.
The acquisition may signal increased deal activity that has been expected in the industry since the U.S. healthcare overhaul passed last year.