Yet another healthcare merger
On the same day that the Anthem/WellPoint merger was announced, there was a smaller but significant announcement from the US's largest managed care company, UnitedHealth. That company will acquire Mid-Atlantic Medical Services Inc (MAMSI), a nearly $3 billion deal in cash and stock.
The combined entity will serve around 20 million customers/members across the US. But it puts UnitedHealth in the number two spot behind the new WellPoint with 26 million. It also gives UnitedHealth a strong position in the corporate headquarter-rich Virginia-Maryland-D.C. area where MAMSI is strong.
UnitedHealth has widespread HMO holdings, including the HMO for the American Association of Retired People (AARP). It is also string in Medicare and Medicaid.
UnitedHealth was created in 1977 to buy up the assets of a Minnesota HMO called Charter Med. In 1994 it spun off its pharmaceutical benefits management company, Diversified Pharmaceutical Services Inc. to SmithKline Beecham Corporation. (it's now a prt of ExpressScripts.
Like WellPoint and Anthem, UnitedHealth is the result of a long series of acquisitions, the most recent of which include:
- In 1995, the company acquired MetraHealth, which was based on the managed health operations of Met Life and Travelers Insurance.
- In 1996 it bought out Community Health Network, a major Louisiana HMO.
- In that year, it also bought HealthWise, a Tennessee-based HMO with customers in Maryland, Kentucky, Tennessee and Arkansas
- Also n 1996, UnitedHealth bought out PHP, Inc., a North Carolina HMO.
- In 1997 UnitedHealth's IT division, Applied HeathCare Informatics, bought medical IT firms O'PIN and Medicode.
- In 1998, the company bought Principal Health Care of Texas.
- In 1998, the company purchased the HMO HealthPartners of Arizona.
- That same year, the Applied HealthCare Informatics acquired medical IT firm Kern McNeil.
- After a failed 1998 merger with Humana, Inc., another healthcare giant, UnitedHealth kept away from merger and acquisition activity for a few years, concentrating on digesting what it had swallowed and pushing internal growth in reorganization.
- In 2002 it got back into the acquisitions game with AmeriChoice, a New York area HMO.
- In September of 2003, it announced plans to acquire Golden Rule Insurance of Indiana.
Most analysts expect that we are in for another round of acquisitions in the health industry, and UnitedHealth has the money and the will to be a leader, if only to regain its preeminence in the industry. Its other growth strategy is in providing a range of managed, specialized services as a way f controlling costs (see below). It will be interesting to see whether the concentration of the big HMOS will make them even bigger targets for regulation as the cost and frustrations of the health system irks more and more baby boomers.
UnitedHealth Operating Units
| Unit |
Area of expertise |
| Regional operating units |
HMOs |
| Uniprise |
Employee health services |
| Ovation |
Medicare and Medicaid |
| Ingenix |
Medoical IT services |
| Specialized care services |
CAN Group (back care), Care Services (clinical evaluation), Dental Benefit Providers, Network Benefit Resources (cost management), Optum (delivery of consumer info), Spectra (vision care), Unimerica Life and Accident (life and accident insurance), United Behavioral Health (psychological services),, United Resource Centers (complex medical conditions). |
8:27:37 PM 
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