By June WellPoint had scooped up CareMore. The deal added about 54,000 new MA members but WellPoint's real focus was the 26 healthcare clinics CareMore owns in Arizona, California and Nevada. The clinics, which are staffed with physicians and other healthcare professionals, specialize in delivering care coordination and intensive treatment to the chronically ill—at a profit.
WellPoint plans to add 12 CareMore clinics in 2012 at an estimated cost of $36 million and expects the new clinics to take 18 months to break even. Running the clinics means WellPoint will be more able to manage the cost of this specialized care on the front-end.
During WellPoint's third-quarter earnings call Braly said part of the strategic value of CareMore is being able to rollout the clinic model of managing the chronically ill across other business lines. "We'll take a measured approach because this is a really targeted model."
4. UnitedHealthGroup and Monarch HealthCare
OptumHealth, UnitedHealth's health services division, announced in September its plans to purchase the operations of Irvine, Calif.-based Monarch HealthCare, a 2,300 physician specialty group. Financial details were not disclosed. The move is part of United's strategy to increase its involvement in the clinical side of the healthcare delivery process in an effort to reduce costs. CIGNA, Humana and WellPoint have taken similar steps in an effort to drive the coordination of care.
Healthcare reform triggered much of this interest in acquiring physicians groups. New medical loss ratio requirements have increased the pressure on insurers to hold costs down or face huge penalties. Also, physicians will play a critical role in the creation and success of commercial accountable care organizations as well as health insurance exchanges.
5. Aetna International and Indian Health Organization
Growing middle class populations in Asia, China and India are creating important international markets for a number of U.S. health insurers, including Aetna and CIGNA. At one time the international health insurance business focused on expatriates and the executives of global companies.
Now U.S. carriers are providing health benefits coverage to the local population. Aetna International, a unit of Hartford, CT-based Aetna, announced in July that it would enter the India market by acquiring IHO and its 80,000 members. In a press statement, Derek Goldberg, Aetna's managing director for Southeast Asia, noted that more than $30 billion is spent each year in India on out-of-pocket medical expenditures. Aetna hopes to leverage the IHO acquisition to build a broader physician network and expand IHOs geographic reach.