HealthPlus' integration into Henry Ford's HAP a turnaround story

As its former CEO, Dr. Michael Genord, oversaw the effort to turn around the financial and operational health of Flint-based insurer HealthPlus of Michigan before the commercial and Medicare business was sold to Health Alliance Plan.

Now, as CEO of HAP Midwest Health Plan, Genord was a key player in completing the integration of HealthPlus into HAP after last year's acquisition, as HAP itself has posted improving finances.

The merger of HealthPlus into HAP was "a unique experience," Genord said. "HealthPlus went through difficult and burning times. You had two happy people merging with the value seen by both sides very quickly. ... It was very touchy (dealing with the people side of the merger), but it went remarkably well."

Genord called it a merger of equals, with HAP taking on some of HealthPlus' best practices in information systems and knowledge of the Flint market. HAP maintains a call center in Flint, where 200 of the 300 former HealthPlus employees still work.

In the two years before joining HAP, HealthPlus had lost more than $35 million. Genord, who took over HealthPlus in 2015, tried to turn around HealthPlus, achieving an estimated $41 million in savings. But it wasn't enough to forestall an eventual sale, which was accomplished in two parts.

In May 2015, HealthPlus sold its 90,000-member Medicaid business to Molina Healthcare of Michigan for an unspecified price. In February 2016, HealthPlus sold the rest of its business to HAP.

HAP itself was suffering through two consecutive years of losses. In 2016, HAP lost $8.5 million, primarily because it lost a major state Medicaid contract and 90,000 members that generated about $24 million in net income.

But the combined organizations bounced back in 2016. HAP posted a profit of $38.5 million last year, despite a 1% revenue decline to $1.9 billion from $2.1 billion the prior year. In 2014, HAP lost $5 million on revenue of $1.8 billion with 271,000 members.

"We are not satisfied with financial performance," Genord said. "We want to leverage the merger to get greater value, with a new CEO (Terri Kline), work with employers, see continued improvement and grow membership."

In the merger, HealthPlus brought over 73,000 commercial and Medicare members. That helped increase HAP's membership to 662,000. Those numbers include about 268,000 commercial members, 66,000 Medicare Advantage, 166,000 self-funded, 127,000 provider network leasing arrangements, 27,000 individual and 7,500 Medicaid.

"HealthPlus​ integration​ into​ Henry​ Ford's​ HAP​ a​ turnaround​ story"​ originally​ appeared​ in​ Crain's​ Detroit​ Business.