Inova's insurance joint venture exits Va. exchange as earnings rebound and other regional news

Inova’s joint-venture health plan with Aetna is exiting the Virginia exchange marketplace in 2018 to stem losses that are dampening an otherwise strong rebound at the system.

As health insurance giant Aetna announced it would leave all Affordable Care Act exchanges in 2018, its joint venture with Inova—Innovation Health—is doing the same, according to Inova Chief Financial Officer Richard Magenheimer.

Magenheimer declined to reveal Innovation Health’s losses in the four years it offered insurance on the Virginia exchange. He simply said “it was not a good financial experience.”

Innovation Health covers about 200,000 people either with commercial health insurance or as a third-party administrator to self-insured employers.

Despite the exchange losses, Falls Church, Va.-based Inova had a comeback quarter.

Magenheimer said volumes at its new Women’s and Children’s Hospital on the main Fairfax, Va., campus helped boost first-quarter earnings, as did an increase in fee-for-service patients.

Inova saw a 4% increase in hospital admissions, a 4% increase in emergency admissions, a 5% increase in in-patient surgeries and a 6% gain in outpatient surgeries across its five hospitals in Northern Virginia.

Admission growth was strongest at Fairfax, where they increased to 12,404 in the quarter from 11,707 in the year-ago period.

—Dave Barkholz

Aetna, Blue Cross and Blue Shield of Illinois and Molina Healthcare were among the insurers who last week submitted bids for contracts to participate in Illinois Gov. Bruce Rauner’s overhauled Medicaid managed-care program.

Insurers that now have managed-care contracts with the state, but did not submit bids, include FHN and its subsidiary Community Care Alliance of Illinois, as well as national insurers Cigna Corp. and Humana.

The health plans are vying for a piece of an estimated $9 billion in contracts a year, over four years. The Rauner administration plans to award up to seven bids.

—Kristen Schorsch, Crain’s Chicago Business

Santa Barbara, Calif.-based healthcare providers Cottage Health and Sansum Clinic called off their proposed merger after fighting regulatory concerns for years, signaling regulators’ increasingly critical stance on vertical integrations.

The not-for-profit healthcare providers announced their plans to merge in 2013, aiming to combine Cottage Health’s three-hospital system with Sansum’s 23 ambulatory clinics and the only medical foundation in the region.

Cottage Health, which operates the only hospitals in south Santa Barbara County and the Santa Ynez Valley, sold off an ambulatory surgery center to alleviate the Federal Trade Commission’s concerns over the deal. But it was evidently not enough.

Cottage Health CEO Ron Werft and Sansum Clinic CEO and Chief Medical Officer Dr. Kurt Ransohoff said in a statement that they would continue to collaborate.

—Alex Kacik