Kaiser Permanente has found a taker for its money-losing managed-care operations in the Raleigh-Durham-Chapel Hill area of North Carolina.
Partners National Health Plans of North Carolina, a for-profit provider-owned HMO with about 3,000 enrollees in the same market, last week agreed to buy Kaiser Foundation Health Plan, which has about 73,000 enrollees in the Research Triangle area. The purchase price was not disclosed.
Kaiser's plan in the area lost $10 million on premium revenues of $202.5 million in 1998 and $16 million on premium revenues of $193.1 million in 1997, according to David O'Grady, a spokesman at Kaiser's national headquarters in Oakland, Calif., and the North Carolina Department of Insurance.
Partners, based in Winston-Salem, N.C., is a subsidiary of not-for-profit Novant Health and bills itself as one of the few profitable managed-care plans in the state. Novant is an eight-hospital system whose flagship facilities are 747-bed Forsyth Medical Center in Winston-Salem and 551-bed Presbyterian Healthcare in Charlotte, N.C.
Through the first six months of this year, Partners has posted a $5 million profit, said Stuart Veach, the HMO's vice president. Last year, the managed-care organization recorded a profit of slightly more than $9 million on premium revenues of $359.8 million.
Those figures include the organization's plans in North Carolina, South Carolina, Virginia, and-through a third-party administrator-in Georgia, Tennessee and West Virginia. The company has 350,000 enrollees.
Kaiser announced in June that it would pull out of five of the 17 states in which it operated, because Kaiser Foundation Health Plans in those states were not financially successful (June 28, p. 18).
"We've made the decision in certain markets to depart," O'Grady said.
In July, Kaiser agreed to sell its Charlotte, N.C., health plan to Principal Health Care of the Carolinas, a subsidiary of Coventry Health Care, Bethesda, Md. (Aug. 9, p. 32).
The Kaiser physicians in the Raleigh-Durham-Chapel Hill area have changed their name from the Carolina Permanente Medical Group to the Carolina Premier Medical Group. They have agreed to continue serving managed-care plan enrollees who are transferred to Partners.
The 71-physician medical group also has announced a letter of intent to pursue a strategic partnership with UNC Health Care, Chapel Hill, to support and expand its practice.