UnityPoint adds Meriter to affiliated providers

UnityPoint Health, until recently known as Iowa Health, is making its biggest reach so far outside of its home state.

Meriter Health Services, Madison, Wis., agreed to become an affiliate of the West Des Moines-based system. Meriter includes a 301-bed hospital and for-profit Physicians Plus Insurance Corp.

“We were fortunate to find in Meriter an integrated health system that could also offer an HMO to our network,” UnityPoint President and CEO Bill Leaver said in a news release. “We see Physicians Plus growing in strength and geographic market coverage over time.”

That health plan, however, has been a source of trouble for Meriter. In September Moody's Investors Service downgraded Meriter's credit rating to A2 from A1 to reflect the insurance plan's “deep operating challenges” that have impinged on the health system's margins and cash flow. PPIC lost $30.1 million in the system's fiscal 2012, ended Dec. 31, and has lost $15.9 million in the first six months of fiscal 2013.

Meriter management attributed the challenges to members of the health plan getting routine care at the University of Wisconsin Health Care, and the plan membership has dropped 25% to 86,000 since the plan renegotiated the terms of that contract in 2011, according to the Moody's report.

The agreement calls for UnityPoint to assume an ownership stake in the health plan, according to a news release. Meriter Board Chair Virginia Graves said the Madison organization would remain locally run “while also gaining the benefits of a broader regional health system's services, experience and expertise.”