One of the nation's largest managed-care companies recently got a whole lot bigger, but what the new super-HMO will mean for providers remains unclear.
Minneapolis-based insurer United HealthCare Corp. announced earlier this summer that it was purchasing Louisville, Ken.-based Humana -- one of the nation's largest publicly traded managed-care companies -- for about $5.5 billion in stock. The new managed-care company will have more than 10 million enrollees and operate in 34 states. The combination will be especially dominant in the Southeast and Midwest, with a total of about 2.5 million enrollees in each of those regions.
One physician who is a Humana provider worries the merger will add another layer of managed-care bureaucracy to his life. "When things get bigger and bigger, it just means controls get tighter and you have fewer people to complain to," says Joel Wilentz, M.D., a Hallandale, Fla., dermatologist.
The new United HealthCare says it will achieve savings through economies of scale and by consolidating administrative and corporate overhead, according to United Chairman and President William McGuire, M.D. He says United HealthCare hopes to reduce operating costs by 3% to 5% and medical costs by about 1%, while "maintaining our commitment to providing our customers with the highest quality health and well-being services they need."
Any discussion of cutting costs, however, makes physicians uneasy because provider reimbursements account for the majority of any health plan's expenses.
Richard Migliore, M.D., vice president of delivery systems management, says that some contracts may need to be modified to add new products. But he asures providers that most future savings will come from eliminating administrative waste.
When the merger was announced, United sent a letter to all participating physicians assuring them that the "merger will not alter the current working relationship," but rather "will greatly expand the universe of existing and potential customers."