Sisters of Mercy Health System could mark its ownership of Mercy Health Plans with the Clinton healthcare reform plan at the start and the Patient Protection and Affordable Care Act at the end.
Out of insurance business
Sisters of Mercy to sell health plan to Coventry
The St. Louis-based Roman Catholic system announced last week that it agreed to sell the roughly 180,000-member health plan for undisclosed terms to Coventry Health Care, Bethesda, Md. The deal is expected to close in 90 to 120 days, pending regulatory approvals, which include federal antitrust review and state insurance reviews, according to a Sisters of Mercy spokeswoman.
The health system decided that it was better for both the system and the health plan to make the sale and allow the system to focus on the core mission of treating patients, said Lynn Britton, president and CEO of Sisters of Mercy.
“In 1994 when we started the health plan, the world was very different than it is today,” Britton said. “Healthcare continues to change, and we change with it.”
Selling the plan enables the system to devote financial and management resources exclusively to providing healthcare services, Britton said.
Despite the huge wave of consolidation among health insurers during those years, Britton said that the communities that Mercy Health Plans operates in—primarily in Missouri, but also in part of Arkansas—don't feel that they need Sisters of Mercy to provide another insurance option. It has about 180,000 members. The system has worked in each of its communities to come up with a master plan, as well as one for the system as a whole, he said, and all of the communities were looking for more services and in more locations, such as schools. “Our communities are telling us that's where we need to put our energy and efforts,” Britton said.
Patients in these communities also have tired of exclusive networks that force them to find new providers when their insurance changes, he said.
The plan and its 420 employees, the majority of whom will join investor-owned Coventry, will benefit from being part of an organization dedicated exclusively to health plans, Britton said. If the deal is completed, Coventry will have 1.2 million members in a six-state region that includes Arkansas and Missouri.
Reform did not directly affect the decision to sell the plan, Britton said. Discussions began long before the law was approved, he said.
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