Today on Health in 2 Point 00, Jess and I discuss UnitedHealth Group acquiring DivvyDose for $300 million, which is a knock off of PillPack. Is there anything left for them to buy? We cover many more deals in Episode 155—Noyo raises $12 million in a series A, helping health plans exchange data, Medigate raises $30 million working on cybersecurity for connected devices in hospitals, OnCall raises $6 million helping health systems launch their own virtual care platforms, RapidAI raises $25 million to improve MRI and CT quality using AI to layer those images, and Medefer raises £10 million offering telehealth and referrals to patients within the NHS. —Matthew Holt
Today on Health in 2 Point 00, it’s the 4th shoe! On Episode 135, we’ve got Amazon’s entry into primary care through its pilot program with Crossover Health, UnitedHealth Group launching Level2, their own digital health diabetes prevention program, Health Catalyst acquiring healthfinch, Truepill raising $25 million and then investing in Ahead, a company which matches psychiatrists to patients. —Matthew Holt
States in more than half the nation have reported individual market premium rate requests for 2015, making this an opportune time to assess how the second year of the ACA’s new marketplaces is shaping up.
With rate filings in for 27 states plus the District of Columbia, the early word on 2015 appears to be expansion. At least 15 of the 28 jurisdictions in 2015 will offer new individual plans this year. Thirty-seven of the 176 health plan filings are new, according to analysis by PwC’s Health Research Institute (HRI).
Major national insurers such as UnitedHealth Group, as well as newbie Consumer Operated and Oriented Plans (Co-Ops), plan to add both products and states when exchange open enrollment begins in the fall. In Virginia, five new plan bids have been submitted to the state; Washington, Arkansas and Tennessee show three new plans each.
UnitedHealth’s CEO Stephen J. Helmsley estimates that UnitedHealth will sell on public exchanges in about two dozen states. In short, the ACA’s subsidized exchange markets represent growth opportunities for the health sector.
At the same time at least three non-profit health Co-Ops will move into additional markets. As of late April, Co-Ops operating in 23 states had 400,000 members, according to the National Alliance of State Health Co-Ops. Not every Co-Op drew big numbers, especially those in states such as Maryland, where the online marketplace never really got off the ground. And it’s far too early to say how many new entrants will be left standing as plans are forced to pay back $2 billion in federal loans over the next several years.
UnitedHealth Group is set to become the controlling owner of the largest healthcare company in Brazil, a country whose health market is rapidly growing, in one of the most high-priced overseas deals by a U.S. private insurance company.
The largest American insurer is spending $4.9 billion to acquire 90 percent of Brazil’s Amil Participacoes, which has about 5 million members, a provider network of 3,300 hospitals and 44,000 doctors, and also owns 22 hospitals and about 50 clinics, reported the Associated Press.
By entering the Brazilian healthcare market, UnitedHealth can better access the country’s 200 million population, only 25 percent of which has private insurance, at a time when Brazilian leaders increasingly are turning to private companies to insure its citizens, Reuters reported.
“Brazil has emerged as a consistently growing and evolving market for private sector health benefits and services. Its growing economy, emerging middle class and progressive policies toward managed care make it a high potential growth market,” UnitedHealth CEO Stephen Hemsley said Monday in a statement.
“Combining Amil, the clear market leader serving an under-penetrated market of nearly 200 million people, with UnitedHealth Group’s experiences and capabilities developed over the last three decades is the most compelling growth and value creation opportunity we have seen in years,” he said.
Amil’s founder Edson Bueno and his partner Dulce Pugliese will retain their 10 percent ownership of Amil for at least five years. Amil also will invest about $470 million in UnitedHealth Group shares, which it also will hold for five years, according to the Minneapolis Star-Tribune.
Now that the Supreme Court has upheld the constitutionality of the Patient Protection and Affordable Care Act (PPACA), health insurers are scrambling to reinvent themselves for a new era. In an earlier post, I quoted Aetna CEO Mark Bertolini as saying he wants to create a business model that makes sense under the new rules and regulations. In a recent speech Bertolini explained, “We need to move the system from underwriting risk to managing populations. We want to have a different relationship with the providers, physicians and hospitals we do business with.”
Starting with Aetna, this analysis will examine the ways that insurance companies are trying to reinvent themselves for a reformed health care delivery system that often wonders why we need health insurers at all.