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Mar
25

Coventry to be acquired by United HealthGroup?

Rumor is UHG is making a run at mid-tier managed care player Coventry Health. Forbes reported late today that Coventry’s share prices ticked up on the ‘news’.
I’m not surprised; as I noted several months ago Coventry is likely to be sold or dismembered this year. CEO Allen Wise has deep-rooted connections with UHG. Formerly an EVP at United, Wise was also a senior executive at MetraHealth and facilitated the acquisition of MetraHealth by UHG.
Coventry has been battered by news that it missed its medical loss projections a year ago, beginning a slide that continued with a major miss on Medicare numbers in the fall. Former CEO Allen Wise was brought in to assess the situation, a move that led to the dismissal of CEO Dale Wolf, a re-ordering of priorities, and renewed focus on the core small group HMO business (potentially at the expense of Medicare, Medicaid, Workers Comp, and National Account segments).
The deal wouldn’t be good news for providers; according to the Verden Group’s survey of physicians UHG is a mediocre performer in terms of policies, procedures, and reimbursement. Hospitals have a much more negative view of the huge plan, as UHG is considered the worst health plan to work with according to a survey by Davies.
If this comes to pass, there will be much more to consider. For now, it’s just a rumor.


Joe Paduda is the principal of Health Strategy Associates

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