In an effort to market their insurance products statewide, two provider-owned health plans in Connecticut last week unveiled plans to merge.
The plans are HealthChoice of Connecticut, a 180,000-enrollee PPO based in Farmington, Conn., and Yale Preferred Health, based in New Haven, Conn. Yale Preferred has one line of business, a 15,000-enrollee Medicaid HMO.
Saint Francis Hospital and Medical Center in Hartford, Conn., co-owns HealthChoice with Yale New Haven Health, which, along with Yale University, also co-owns Yale Preferred.
By pooling assets and pouring fresh capital into the mix, the provider owners of the two plans hope "to have a say in the way in which managed care is delivered in the state," said John Rohfritch, HealthChoice's president and chief executive officer.
Rohfritch will head the merged organization, which will adopt the HealthChoice name. If approved by state regulators, HealthChoice would become the state's largest provider-sponsored HMO.
The three owners will have an equal voice in major governance issues affecting the merged company. But, Rohfritch said, Yale University's financial stake is slightly smaller than the two other shareholders.
Rohfritch said shareholders have agreed to invest whatever is needed for the plan's working capital and expansion, although he declined to disclose the plan's total assets and capital requirements.
To succeed in a market dominated by big HMOs like Cigna, Aetna U.S. Healthcare, Oxford Health Plans and Foundation Health Systems, HealthChoice will have to solve the management and capital problems that have caused some provider-owned plans to stumble and sell to a bigger outfit.
"That's the challenge we're going to have to deal with," Rohfritch said.