Ascension Health, the nation's largest not-for-profit health system, has signed a non-binding letter of intent to acquire an insurance company.
St. Louis-based Ascension did not name the company in newly released municipal bond documents, but described it as one that “provides life, accident and health-related insurance policies on a group basis and provides benefits processing, payments and other services.”
Robert Henkel, president and CEO of Ascension Health, said during an interview at a recent investor conference that the system was in talks to acquire a health insurer operating in 18 states. Speculation last week by an investment bank analyst identified two publicly traded health insurers as possible targets: Centene Corp. and WellCare Health Plans.
Ascension’s latest bond documents said the price of the deal is not believed to be material and officials will seek to close the insurance acquisition by October.
Ascension includes 101 hospitals with more than 11,400 acute-care hospital beds and ended its last fiscal year with operating surplus of $397.3 million on revenue of $17.1 billion. The system is one of a number of hospital operators with plans to launch or increase insurance businesses.
The strategy will position hospitals to manage the financial risks of new payment models that include incentives to reduce cost by eliminating waste and promoting healthier communities, executives say. “We anticipate we will take more risk,” Henkel said in New York.
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