WellPoint Health Networks reportedly plans to acquire the health insurance operations of John Hancock Mutual Life Insurance Co., based in Boston.
Talks between the companies are in their final stages, the Wall Street Journal reported last week, citing sources close to the transaction. A spokesman for John Hancock said the company had no comment. Officials of Woodland Hills, Calif.-based WellPoint couldn't be reached.
Word of the talks came two days after Foundation Health Corp. and Health Systems International announced they plan to merge (See story, p. 2). A merger of HSI and WellPoint fell through last year in part because of rivalry between HSI's chairman and chief executive officer, Malik Hasan, M.D., and Leonard Schaeffer, WellPoint chairman and CEO.
Acquiring Hancock's health insurance operations fits in with WellPoint's strategy of buying insurance companies that seek to exit the healthcare business. WellPoint would ease their indemnity clients into more profitable managed-care products.
This year, WellPoint acquired the group health insurance subsidiary of Massachusetts Mutual Life Insurance Co. for about $380 million.
In August, Schaeffer told MODERN HEALTHCARE*that WellPoint isn't focused on HMOs but on creating products tailored to specific customer needs. That means offering a wide variety of products, from indemnity plans to HMO hybrids, he said.
To meet those goals, WellPoint plans to acquire companies and build products from scratch, Schaeffer said.
Schaeffer said WellPoint is in continual discussions with potential partners all over the country, including other Blue Cross and Blue Shield plans. WellPoint this year completed its conversion to a for-profit, publicly traded Blues plan.