Competition from provider-owned health plans is increasing, with one of the country's largest national health systems scooping up an HMO in the South that could be a platform to enter other markets.
Catholic Health Initiatives' Collab Health subsidiary is acquiring QualChoice Holdings, the Arkansas-based operator of the HMO QCA Health Plan and its related insurance company, pending regulatory approval.
At 87 hospitals across 18 states, Catholic Health Initiatives is the third largest religious-based health system in the country, and the stock purchase of QualChoice marks one of its early forays into the insurance business, following last year's acquisition of Soundpath Health, a small Medicare Advantage plan in Washington State.
"Making an investment in a quality health plan such as QualChoice is integral to CHI's population health strategies," said Juan Serrano, Catholic Health Initiatives senior VP of payer strategy and operations, in a media release.
Arkansas, where Catholic Health Initiatives operates St. Vincent Health System, is "a fantastic place to develop our health insurance capabilities as we strive to better serve communities here and across the nation," Serrano said.
CHI's St. Vincent Health System has been accepting patients covered by the statewide QCA Health Plan since its inception in 1996. Since 1999, CHI has also been an investor in the insurer, along with TriZetto Corporation, the University of Arkansas for Medical Sciences, Arkansas Children's Hospital and Tenet Healthcare.
The purchase price of CHI's buyout of those other investors is not being disclosed, and the deal is still subject to approval by Arkansas insurance regulators.
The acquisition of QualChoice by a Catholic health organization raises the question of how reproductive care, such as covered abortions, will be treated, especially if the insurer is expanded into other markets. Michael Stock, QualChoice's CEO, said in a statement that no benefit changes are anticipated, with patients still having access to the services at providers that offer them.
"To the extent federal and/or state governments mandate coverage for healthcare benefits, QualChoice is required to comply with those federal and state laws where applicable," Stock said. "To the extent mandated benefits conflict with the Catholic Ethical and Religious Directives, QualChoice will institute appropriate administrative practices consistent with the way other Catholic organizations have operated health plans."
In 2010, the QCA HMO's parent organization QualChoice was set up as a holding company after the acquisition and restructuring of Community Bank Life and Health Insurance Company. One of four insurers selling individual plans through Arkansas's public insurance exchange, the HMO now sells both fully-insured and self-insured products and also administers a health plan for state and public school employees. Today the company has about 72,000 members.