BLOOMINGTON, MN - Nonprofit health provider and insurance organization HealthPartners and Park Nicollet Health Care announced in late August they would combine operations in a move that would create the second largest healthcare system in Minnesota and one that also operates a 1.5 million-member strong health plan.
When completed, the combined organization will comprise a 1,500 physician multispecialty group that combines the Park Nicollet family of specialty care facilities with HealthPartners network, which consists of 70 medical and dental clinics and four hospitals in Minnesota and Wisconsin. The health network will serve the Twin Cities region and parts of western Wisconsin.
By merging, the two entities hope to improve the coordination of care, while creating stronger links between care providers and insurance in an effort to reduce costs and improve healthcare quality.
"One of the interesting things we have noticed is (Park Nicollet) is on similar journeys to ours in terms of redesigning healthcare," said Andrea Walsh, executive vice president of HealthPartners. "We had this growing realization that we are both after the same thing and rather than building that out twice there may be synergies and savings by doing it together as a single organization."
David Abelson, MD, president and CEO of Park Nicollet agreed with that assessment and noted that his organization wasn't looking to combine with any of the other providers in the market, but instead, noted that Park Nicollet and HealthPartners are "like-minded organizations with respected histories and traditions of innovation."
"We're both mission driven organizations that share a common vision of improving the health, experience and affordability of healthcare in the communities we both serve," Abelson continued. "We realized we can accomplish this better as a combined organization than trying to do it separately. It's a natural fit."
Because the organizations enjoy a well-recognized presence and reputation in the markets they serve, both will continue to operate under their existing names and patients and plan members will continue to interact with their providers and health plans as they have before. The long-term goal is for the two to develop a more refined coordinated care approach.
Plans call for the combined entity to be governed by a board of directors comprising consumers from the local market. Top management will stay on to oversee the new organization, with HealthPartners president and CEO Mary Brainerd assuming the position of CEO, while Abelson will lead and managed the new care delivery system, to be named the Park Nicollet HealthPartners Care Group.
The deal also highlights a growing trend in the healthcare market: providers and health plans combining in order to manage the health of populations. According to Walsh, roughly one-third of HealthPartners' 1.4 million plan members currently receive their care at one of its facilities. When the two groups are combined a little less than half of its members will receive care from the new group.
"HealthPartners is first and foremost an insurance company," said Steve Parente, a healthcare economist at the University of Minnesota's Carlson School of Management, in a StarTribune report. "This gives them more of a diversity play than any insurance company in town. It reflects a broader national trend where insurance companies are taking the lead position to determine how these integrations will occur."
Pending regulatory review, the closing is expected to be effective Jan. 1, 2013.