Humana is seeking to acquire more provider-owned health plans in 2009 if the opportunities are right, Mike McCallister, chief executive officer of the health insurance company, said at the J.P. Morgan Healthcare Conference in San Francisco.
I would argue right now that we are the best buyer of hospital-owned health plans, McCallister told investors and analysts during a question and answer session at the conference.
Last year, Humana purchased OSF Health Plans in Peoria, Ill., for $90.5 million, and Knoxville, Tenn.-based PHP Cos., which is doing business as Cariten Healthcare, for $245 million. Both were cash deals and McCallister said that Humana is positioned well to make further acquisitions. We wont sit on our cash, he said.
Humana is attracted to smaller cities and regions nationwide, McCallister said. For instance, the OSF Health Plans deal added only about 78,000 members to Humanas rolls, but now gives the insurer access to about 2.5 million people living around Peoria. It gave us a foothold to sell other products, he said. My top of list is second-tier city regions.
The Louisville, Ky.-based health insurer has specific criteria when buying provider-owned health plans, McCallister said. For instance, technology systems must be somewhat robust and up to date.
I cant have a dozen broken-down old platforms, McCallister said. That would screw me up.
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