Ascension Health Subsidiary to Buy Insurer for $50M

The deal is expected to clear regulatory hurdles, but one observer says "a possible snare going forward is that insurers start to look at Ascension as less of a provider partner and more of an insurer competitor."

Together Health Network, a subsidiary of Ascension Health, has notified the state of Michigan that it plans to buy US Health and Life Insurance Company for $50 million in cash.

Together Health Network is a clinically integrated network that was formed in July 2014 as a collaboration of Ascension Health Michigan, Trinity Health, and physician groups across the state.

USHL, based in Sterling Heights, MI, operates in 20 states and specializes in providing insurance products for small employers. The company is authorized to sell plans under the Patient Protection and Affordable Care Act.

Requests for comment on the deal from St. Louis, MO-based Ascension were not immediately returned.

Allan Baumgarten, a healthcare analyst working in Michigan and throughout the Midwest, says the acquisition is not a surprise.

"There were reports last year that Ascension would acquire an insurer, but the focus then was on large players like WellCare and Centene," Baumgarten said by email.

"US Health and Life is a very small player—$67.6 million in 2013 revenues, 18,600 insured enrollees in 2014. The $50 million cash purchase price seems high, but maybe this is an acquisition where the value of the insurer is in its license in MI, WI, OH, IL and some other states where Ascension has major hospital holdings and is looking to offer its providers to self-funded employer groups or maybe get into commercial business."

Baumgarten says Ascension's joint network with Trinity Health in Michigan has an ACO-like arrangement with Blue Care Network in Michigan for its Michigan Medicare Advantage plans.

While the deal likely will clear regulatory hurdles, Baumgarten says "a possible snare going forward is that insurers start to look at Ascension as less of a provider partner and more of an insurer competitor."

CHC to Operate Jellico (TN) Community Hospital
Jellico Community Hospital, a 54-bed acute-care hospital in Jellico, TN, and its CarePlus Center, in Williamsburg, KY, on May 1 will enter into a new management relationship with Community Hospital Corporation, according to a joint media release.

Financial terms were not disclosed.

"We share JCH's compassion and mission 'to provide more than quality healthcare'," Mike Williams, CHC president/CEO said in prepared remarks. "Throughout our due diligence process, we've been very impressed with the quality of JCH physicians and employees and their commitment to providing excellent healthcare to this community." 

With the JCH deal, CHC owns, manages, and consults with 21 community hospitals nationwide.  

On May 1, 2014, Adventist Health System gave JCH one year's notice that it would end its lease with the City of Jellico. The JCH board examined several potential partners for strategic affiliation but last autumn voted unanimously to hold discussions only with CHC.

"We have been proud to serve the community of Jellico for 40 years, but the financial pressures and hardship of managing a small community hospital without the partnership and resources of a larger system within the region are no longer sustainable," Jimm Bunch, chairman of the JCH board said in prepared remarks. We are pleased that CHC will embrace and further our mission in this community." 

CHC has also entered into a clinical affiliation agreement with Baptist Health, headquartered in Louisville, KY. CHC and Baptist Health already collaborate for long-term acute care through ContinueCARE Hospital at Baptist Health Corbin (KY), 30 miles north of Jellico. 

"Increasingly, we are looking for relationships that can demonstrate the value and benefits of the Baptist Health network working in collaboration with local healthcare providers to deliver quality care close to home to better serve their communities," Baptist Health CEO Stephen Hanson said in the media release.