HealthSpring, Nashville, Tenn., has agreed to acquire The Oath of Alabama, Birmingham, for an undisclosed sum. The deal is scheduled to close early next month, pending approval from Alabama insurance regulators. The 30,000-member Oath HMO is the sister company of the now-defunct The Oath of Louisiana, which was $52 million in debt when insurance regulators seized and began to liquidate the health plan earlier this year. The Alabama Oath has posted a $465,000 loss so far this year, a dramatic turnaround from the $19.2 million it lost in 2000. Healthcare consultant Barry Scheur bought the plan from Baptist Health System, Birmingham, Ala., in 2000. State regulators continue to monitor its progress.
HealthSpring is 50% owned by NewQuest, a private healthcare company based in Houston. Saint Thomas Health Services, Nashville, and Tenet Healthcare, Santa Barbara, Calif., also hold interests in HealthSpring. NewQuest also owns Houston-based Rennaissance, an 850-physician independent practice association, which has applied to acquire AmCare Health Plans' 7,400 Medicare HMO enrollees in Houston. AmCare was taken over by Texas regulators in September because of mounting financial woes. Renaissance would rename the plan HealthSpring of Texas. -- by Laura B. Benko