Another healthcare provider is getting out of the managed-care business.
The giant WellPoint Health Networks signed a definitive agreement late last week to buy Chicago-based Rush Prudential Health Plans for $200 million.
Rush Prudential, which has 303,000 members, is co-owned by 719-bed Rush-Presbyterian-St. Luke's Medical Center in Chicago and New Jersey-based Prudential Insurance Company of America. Aetna bought Prudential's managed-care business in August but Rush Prudential was left out of that deal.
The proposed acquisition by Thousand Oaks, Calif.-based WellPoint is expected to close in the first quarter of 2000.
WellPoint, which does business outside California under the name Unicare Life and Health Insurance Co., already has 283,000 enrollees in Illinois.
Nationally, WellPoint has 7.2 million enrollees in all of its managed-care products. WellPoint is the for-profit parent of Blue Cross of California.
"It gives us more critical mass in a very important market," said John Cygul, a WellPoint spokesman, about the proposed Rush Prudential acquisition.
In a prepared statement, Barbara Hill, president and chief executive officer of Rush Prudential, said, "We see attractive growth opportunities with the broad product offerings created by combining with Unicare."
In 1998, Rush Prudential's 222,000-enrollee HMO had net income of $2 million on total premium revenues of almost $328 million, according to financial statements filed with the Illinois Department of Insurance. Total financial figures for all of Rush Prudential's business, including a PPO and point-of-service product, weren't available.
WellPoint, collectively, posted net income of almost $198 million on total revenues of $5.5 billion for the nine-month period ended Sept. 30, according to the company.