This is the second such move that I am aware of in California. With Sutter this is in northern California and back in November Memorial Care announced they were creating their own HMO. This gets kind of interesting as you watch the numerous subsidiary actions of United Healthcare today and there are many. Optum Health in the area where Memorial services in southern California quietly took control of Memorial Healthcare IPA, the doctor’s group in the Long Beach area, so again interesting that you have this in southern California and now United seemingly running the creation of the HMO in northern California.
Again with all the numerous subsidiaries it seems United is almost in line to make a dollar in healthcare at almost every turn these days. The SignatureAlliance program has already been rolled out in parts of California and you get to use the UnitedHealthcare pharmacy benefit manager they own “Prescriptive Solutions” for medications as well.
Before Optum/Ingenix days Mr. appears to have worked for PacifiCare, which was also purchased by United a few years ago. Here’s a few other subsidiaries below of the company for a quick mention and then there was also the big purchase of the IPA in Orange County of Monarch Healthcare to where they doctor’s group is owned by United. There seems to be a long daisy chain developing today with trying to keep track of who is a subsidiary of who’s subsidiary.
Of course the owned Monarch is covered under the Alliance Network where you get a coach, stuff to read on a portal, text message reminders, and probably some of their predictive behavior guidance analytics scoring processes. Some of this is good but on the other hand it gives United truckloads of data to sell as they have long been a big data seller of all types of information beginning with prescriptions and has moved on into other areas from there, they make millions selling data like many other companies do today in that multi billion dollar profit area that contributes to the reason companies have all time high profits, no risk to sucking up some data and putting it up for sale in a very minimally regulated area of healthcare today. More on data selling as it exists today at the links to the Killer Algorithm series.
United HealthCare Gets In the Medical Device Business–Distributing Cheap Hearing Aides Sold Via Hi HealthInnovations Division –Subsidiary Watch
UnitedHealth subsidiary (Ingenix Subsidiary I3) Acquires ChinaGate – Working to Sell Chinese Products Globally
QualityMetric/Ingenix (United HealthCare) Receives Patent for Patient Health Survey Algorithms-Subsidiary Watch
So whether it’s a survey, medical claim, device, imported drugs, devices, insurance, they seem to be represented in so many entities anymore. Sutter has a long standing relationship with Ingenix (OptumInsight) going back to a post that I did in 2009 with a five year contract Sutter signed with them for business intelligence software and analytics based on reducing costs.
Sutter uses Epic medical records systems and to capture even more business with the billing side, United also created a clearinghouse company to scrub claims. They are one of the most profitable hospitals systems in California and have come under fire here and there to include a couple nurses strikes. You can can maybe see why some other clearinghouse businesses might be concerned as many of the major hospital systems use Epic and this could put some smaller companies out of business. I posted this a year ago about the new clearinghouse company United created.
OptumInsight (A Wholly Owned Subsidiary of United HealthCare Optum Division) Creates Medical Clearinghouse Integrated With Epic Practice Management Software-Subsidiary Watch
What put Ingenix in front of the public in the news was the 15 year settlement where they had short paid doctors and hospitals for out of network services that is still in the process of being settled, along with many other additional lawsuits as other insurers “licensed” the data base and used it to short pay claims as well. Just a couple days ago the AAFP confronted United Healthcare with paying doctors less than Medicare in several areas of the US referencing several of their contracts too, and this of course gets back to the “algorithm” business, all this fine tuned to work on complex IT infrastructure systems. So it appears long term working relationships and data and system algorithms seem to be calling the next moves here with the new HMO. BD
The AAFP Confronts United Healthcare On Reimbursements, Some Are Below Medicare Rates In Parts of the US–Payment Algorithms/Formulas Calculated Deep Within IT Infrastructures Do the Job
Sutter Health has hired a CEO for a new HMO plan currently under development.
Stephen Nolte, 52, has consulted with Sutter on the project for the past few months. On Dec. 31, he’ll take the helm.
Angling to get more control over how health care dollars are spent, Sutter applied for an HMO license from state regulators in August. The health system hopes to get approval in time to begin sales next fall for coverage in 2014.
Since 2010, Nolte has been principal vice president for health and human services consulting for OptumInsight, a subsidiary of UnitedHealth Group that used to be called Ingenix Inc..