Coventry’s management has added an old colleague, Skip Creasy, to the executive team. Creasy worked with many of the present Coventry team in a prior life at Travelers’ Health Company; Shawn Guertin, Harv DeMovick, Tom McDonough, CEO Dale Wolf, and others were all affiliated with either Travelers, successor MetraHealth, or UnitedHealthCare after UHG acquired MetraHealth.
According to the press release, Skip “Creasy will be responsible for the development of Coventry health plans in new markets, including those markets to be added in the pending acquisition of First Health.”
Perhaps Eliot Gerson is next?

Managed Healthcare Executive magazine published their annual survey of HMO enrollment in December.
The numbers show that most states actually experienced a decline in HMO enrollment, and nationally there was a decline of some 3 million members. Part of this may well be definitional issues, as HMOs have morphed into “open-access” HMOs, “closed network” PPOs, and the like. Regardless, this is an interesting development; early (albeit anecdotal) indications are that enrollment in more tightly managed plans may actually be increasing, as employers battle significant trend rates.

Bill McGuire, MD, chairman and CEO of UnitedHealthGroup, was interviewed by the journal “Health Affairs” recently, including, amongst other topics, UHG’s work in the area of physician practice pattern variation, .
UHG’s approach seems to be to identify centers of excellence for (primarily inpatient) high dollar claims, such as transplants, cancer, orthopedics, etc, and to encourage employers to preferentialy utilize these centers. UHG’s philosophy is to present the information to the employer, and give the employer the option of encouraging the utilization of the preferred centers. The tools available to the employer include benefit design, network customization, and cost sharing.
Not noted in the conversation is any attempt by UHG to provide feedback to non-center of excellence physicians on their practice patterns, the outcomes thereof, and associated costs. Instead, UHG is identifying those providers, down to the surgical team level, that have the best outcomes, and promoting those providers.
Interestingly, McGuire does not promote the use of narrow networks of a few highly-credentialed physicians with best-in-class outcomes.
To quote McGuire;
“I’m not sure that narrow networks get significant savings. Primary care gatekeepers did not lower costs. If people want narrower networks for some reason, we are in a position to facilitate that. But, philosophically, our desire is to bring the overall level of care, by a broad population of care providers, to a higher standard

The pending acquisition of First Health by Coventry is due to close within the month. First Health’s shareholders are scheduled to vote on the deal Jan 28th (evidently there is no need for a Coventry shareholder vote).
The announcement signals that all regulatory approvals have been obtained.
The deal had received a response from the analysts and financial markets that can only be described as lukewarm to downright cold, as Coventry’s stock value plummeted after the announcement on October 14. However, the price has recently recovered, and is now essentially unchanged from the pre-announcement level.
While it is impossible to precisely identify the reason for the increase, one can only assume it is due to confidence in Coventry’s management and their ability to turn around an under-performing asset. To quote S&P;
“Standard & Poor’s believes Coventry maintains a good financial and market profile, partly because of its sustained pricing discipline and strong focus on the fundamentals of its business. Standard & Poor’s also believes Coventry is capable of integrating First Health in a methodical way that limits operational disruption to the consolidated enterprise. ”

It looks like the Anthem-Wellpoint merger is going to go through after all. John Garamendi, the Insurance Commissioner of California, was holding up the merger, claiming it would cost California’s members in both dollars and health care quality.
Garamendi successfully negotiated with the merger parties, getting them to provide over $100 million in payments to fund rural health, child health, nurse training, and other initiatives. In addition, Anthem-Wellpoint promised to not raise CA premiums to pay for the merger; the actual language mentioned that the entity will not pass along merger costs to Blue Cross (Anthem) customers in CA.
This is exactly what we had predicted would occur; the only surprise is it took longer to get the deal done than I thought.
What does that mean? Maybe something, perhaps not much. There are any number of reasons for premium increases, and lots of ways to change premiums that could be used to “hide” merger-associated costs. These could include:
–plan design changes
–different provider panels
–amortization of capital expenses
–different risk pooling
–increased distribution expenses
— and on and on.
The net is this – Garamendi got some additional concessions, the “rate increase” deal is probably unenforceable, and he, and Anthem-Wellpoint, can move on to other priorities. For Garamendi, it may likely be contingent commissions, sham-bidding, and other broker-consultant games. Your author’s opinion is this elected official can’t stand to be upstaged by another regulator, and Mr. Spitzer’s press is likely driving Mr. Garamendi nuts.
While Anthem and Wellpoint are free to move on, brokers, agents, et al are likely to feel the “wrath of a regulator scorned.”