By Aine Cryts
Grand Rapids-based
Priority Health, the second-largest payer in Michigan, on Aug. 28 said it would
acquire Total Health Care, a Detroit-based HMO. Industry insiders tell AIS
Health that the deal could help the two smaller payers compete with dominant
insurers like Blue Cross Blue Shield of Michigan.
Though the transaction is
described as a merger by the two companies, Total Health Care will be a wholly
owned subsidiary of Priority after the deal's completion, spokesperson Jeremy
Bakken says. The deal is expected to be completed in early 2020, pending
approval by state regulators.
Experts say the payer
market is in "consolidation mode" both in Michigan and nationally. In
addition, as payers gain more experience with insurance products sold to
individuals and through employers, they're more likely to offer products to
Medicaid and Medicare Advantage beneficiaries.
For example, Health
Alliance Plan (HAP), a Detroit-based not-for-profit health plan subsidiary of
Henry Ford Health System, in June acquired TRUSTED Health Plan, a 9,000-member
Medicaid MCO based in Detroit. And Grand Blanc-based McLaren Health Care, a
13-hospital health system, acquired Indianapolis-based HMO MDWise in 2018.
Providers also are
joining forces in the state, says Greg Gulick, an adjunct professor at Michigan
State University's Eli Broad College of Business. He says those deals are
focused on gaining market share, growing the health systems and discovering new
delivery models.
For example, Spectrum
Health, a large health system serving 13 counties in West Michigan (and the
majority owner of Priority Health), moved to acquire St. Joseph-based Lakeland
Health, a three-hospital system, in 2018. And in July, Southfield, Mich.-based
Beaumont Health, a nonprofit eight-hospital system, signed a letter of intent
to acquire Summa Health, a hospital system with more than 30 locations in the
Akron/Canton area.
From Health Plan Weekly
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