Louisville, Ky.-based Humana agreed to sell 13 of its 18 Chicago-area outpatient clinics to a local not-for-profit hospital system last week, marking a change in its physician strategy.
Humana said it might sell four of the remaining five clinics to another not-for-profit system. It said the move follows its strategy of exiting the provider services business to focus on insurance.
That's a change from last summer, when the insurer announced the creation of a separate business unit to run its 95 clinics, which employ 450 physicians. At the time, Humana said it would try to market the clinics to other payers but had no intention of selling them.
Last week Humana spokesman Jon Drayna said the insurer would consider selling the clinics on a case-by-case basis. Besides Chicago, they are located in Florida, Kansas City, Louisville and Texas.
Terms of Oak Brook, Ill.-based Advocate Health Care's deal to buy 13 Humana clinics weren't disclosed. The sale is expected to close by May 1.
Advocate operates eight hospitals in the Chicago area and has $1.7 billion in annual revenues. The 13 clinics have 165 affiliated physicians and generate $360 million in annual revenues, according to Advocate and Humana.
Meanwhile, Advocate competitor Evanston (Ill.) Northwestern Healthcare, a two-hospital system, has an option to buy four of Humana's remaining five outpatient clinics in the Chicago area. Last year ENH signed a five-year contract to provide care to patients referred from the four Humana clinics (Dec. 1, 1997, p. 68).
Humana wouldn't disclose plans for the fifth clinic.
Neither ENH nor Humana would comment on the possibility of a deal or whether there was a deadline for a sale of the remaining Chicago-area clinics.
As for Advocate, a deal it made last year with Humana might have set the stage for the acquisition of the clinics.
In an effort to exit the insurance business and focus on providing healthcare, Advocate last year sold its managed-care plan, Health Direct, to Humana for $20.5 million. Health Direct had about 28,000 enrollees.
Neither party would confirm whether Advocate used any of the funds to buy the clinics.