Private Equity Hunt for U.S. Health-Plan Acquisitions Warming Up And Offering Competition to Insurer Acquisitions and Mergers

One big player mentioned in this article is Coventry Health who has grown by acquiring health plans and not too long ago they bought Mercy Health Plans. Private equity firms like Carlyle Group and others are looking to do the same, buy HMO and/or PPO groups.

Coventry Health Care Acquires Mercy Health Plans – Part of the Catholic Healthcare System With Focus on Increasing Shareholder Value

As we know the industry is pretty well fragmented and I say that alone with all the 3rd party businesses that could easily go away with the glut of software companies that process and analyze medical billing. Over the years that portion of the business has been way over done and could be streamlined and in the process perhaps some of what we pay for healthcare will go down.

As mentioned in this article, UnitedHealthGroup (formerly known as United HealthCare) has grown by acquisition over the years and I try to advise all to keep abreast on what some of these companies are doing so you are not caught by surprise.

Two Private Equity Firms to Buy Medical Care Provider Multiplan – ValuePoint Plan Connects to UnitedHeatlhGroup

The link below offers a summary of some of the recent acquisitions of UnitedHealthGroup and there are many in their portfolio and they own a ton of those over done 3rd party billing services too. 3rd parties carve out a profit from transaction fees on each claim filed and sometimes you may have 2 or 3 taking a portion of the dollar amount, again sometimes overdone. Read about some new acquisitions such as the China Gate company that will work to promote more Chinese drugs and devices both here in the US and globally, it’s a changed world.

Consumer Watchdog Warns Sebelius on Health Insurers – Good Reason for This as Insurer Subsidiaries Are in The Game to Play Just As Private Equity Groups Diversify and Collaborate Holdings

Recently too we had the Caritas purchase of the hospital chain in Massachusetts that have now gone over to the “for profit” side. BD

July 12 (Bloomberg) -- Private-equity firms Carlyle Group and GTCR Golder Rauner LLC are looking to buy medical insurers, made newly attractive by a surge of customers expected from the U.S. health-care overhaul.

Buyout managers are focused on health plans with enrollment of 500,000 or less, particularly those specializing in coverage for the poor, said Chip Clark, a partner at New York-based Ernst & Young LLP, who advises potential buyers. If those companies stay independent, they may struggle with new taxes and regulations from the overhaul signed into law in March, he said.

Carlyle sees medical insurers as “an attractive investment opportunity,” said Karen Bechtel, the managing director who heads the company’s health-care team. Carlyle “will likely continue to make investments in this sector,” she said in an e- mail. The company, based in Washington, is the second-biggest private-equity firm, after Blackstone Group LP in New York.

The largest health insurers, UnitedHealth Group Inc. of Minnetonka, Minnesota, and WellPoint Inc. of Indianapolis, have grown partly through acquisitions.

The health law cuts $130 billion in subsidies to private plans that administer Medicare. While that may make the business less attractive, the law leaves industry a role in a program expected to grow as the U.S. population ages, said Thomas A. Scully, a general partner at Welsh, Carson, Anderson & Stowe, a New York-based private-equity firm with $20 billion in assets.