Health

Centene Makes $6.3B Bid for Fellow Insurer Health Net

Published

9 years ago

July 2, 2015

TOM MURPHY, AP Business Writer

Centene has jumped into the mix of managed-care companies scrambling to bulk up as the health care overhaul changes their business with a $6.3-billion bid for fellow insurer Health Net.

The deal announced Thursday gives St. Louis-based Centene a chance to expand in two hot growth areas for health insurers, the state- and federally-funded Medicaid program for the poor and people with disabilities; and the federally-supported Medicare Advantage program, which has seen its overall enrollment triple over the past decade.

The health care overhaul is expanding Medicaid coverage to millions as it seeks to provide health insurance for more people. This comes as more states are turning to insurers to help them manage their Medicaid populations.

Centene said the Health Net deal will strengthen its presence in the nation’s largest Medicaid market, California, and create a combined company with about 6 million Medicaid members, making it one of the largest in the country.

“Both Centene and Health Net recognize that scale and diversification are becoming increasingly important,” Centene Chairman and CEO Michael Neidorff told analysts after the deal was announced.

The acquisition also will build Centene’s Medicare business in several western states. As the baby boom generation ages, insurers are seeking to offer more Medicare prescription drug coverage and Medicare Advantage plans, which are privately run versions of the federally-funded program for people over age 65 and the disabled.

About 16.8 million people were enrolled in Medicare Advantage plans as of March, according to the nonprofit Kaiser Family Foundation, which studies health care issues. That figure grew by more than 1 million from last year.

“I would say the growth prospect of Medicare is the prime reason someone would add that membership on to their books,” said Vishnu Lekraj, an analyst who follows the industry for Morningstar.

Investors and analysts have been expecting huge acquisitions in a managed care sector that is looking to grow as it adapts to the health care overhaul. Some say the Supreme Court’s recent decision to uphold a key element of the federal law might spark deals because it removes an element of uncertainty that had been hanging over the companies.

On June 20, Anthem went public with a more than $47 billion cash-and-stock bid for Cigna, which Cigna rejected in a letter sent to Anthem the next day.

Both the Wall Street Journal and Bloomberg have reported, citing sources they have not identified, that Aetna is pursuing the Medicare Advantage provider Humana Inc., in a deal that would join the nation’s third- and fifth-largest health insurers.

“The wave of consolidation sweeping the (managed care) industry is accelerating as players seek to establish their own market position,” Leerink analyst Ana Gupte said in a note to investors announcing the Centene deal.

She added that she expects the nation’s biggest insurer, UnitedHealth Group Inc., to jump in with a competing bid for Health Net or possibly both companies.

A UnitedHealth spokesman said his company doesn’t comment on rumors or speculation.

Insurers see several potential advantages to combining. An acquisition would give them more customers over which to spread the costs of providing coverage and processing claims, and it lets them diversify and expand into new markets faster than they can by signing up new customers.

Combining with a competitor also can help an insurer quickly strengthen its technology resources, which is an increasingly vital part of the business.

Centene Corp. plans to pay a combination of cash and stock valued at $78.57, based on Wednesday’s closing price, for each Health Net share. That’s a premium of about 21 percent over Health Net’s closing price of $65.06. The deal totals about $6.8 billion counting debt.

Centene shareholders would have about a 71 percent stake in the combined company, which Neidorff will lead as chairman, president and CEO.

Both companies’ boards have approved the acquisition, which is expected to close early next year.

Shares of Health Net soared 11 percent, or $7.17, to $72.23 after the deal was announced Thursday, while Centene sank about 6 percent, or $4.82, to $76.08.

Like other health insurers, the shares of both companies have hit all-time high prices this year and advanced much further than the broader market. Centene’s stock price was up about 56 percent as of Wednesday, while Health Net had advanced 22 percent.

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Activism

NAACP California-Hawaii State Convention Highlights Black Voter Engagement, and More

A Friday panel featuring NAACP Chairman Leon W. Russell and Regina Wilson, Executive Director of California Black Media, examined Project 2025, an initiative perceived as a potential threat to civil rights, healthcare access, and environmental protection. This session emphasized Project 2025’s projected impact on Black communities, noting that policies within the initiative could diminish gains in civil and environmental rights over decades. Russell and Wilson highlighted the need for vigilant monitoring and community mobilization to address these challenges.

Published

1 day ago

November 4, 2024

Oakland Post

NAACP State Conference President Rick Callender (right) engages in a discussion on voter engagement and community advocacy with NAACP President and CEO Derrick Johnson during the 37th NAACP California-Hawaii State Convention in Los Angeles. Photo by Rich Woods.

By Bo Tefu, California Black Media

The 37th NAACP California-Hawaii State Convention concluded on Sunday, Oct 27, following four days of discussions and workshops at the Los Angeles Airport Marriott. Bringing together civil rights leaders, policymakers, and advocates from California and Hawaii, the convention operated under the theme “All In.” The participants discussed critical issues impacting Black communities, including criminal justice reform, health equity, economic empowerment, education, environmental justice, and voting rights.

On Saturday, the President’s Fireside Chat brought together NAACP President Derrick Johnson and CA/HI State Conference President Rick Callender, who discussed the urgency of voter engagement and community advocacy.

Guest speakers included Congresswoman Maxine Waters (D-CA-43), who spoke at the Women in NAACP (WIN) Labor Luncheon about the intersection of labor rights and civil rights. California State Superintendent Tony Thurmond delivered remarks at the Leadership Dinner on education equity, focusing on policies to ensure all students have access to high-quality education.

Honors were given to longtime social justice advocate and former Assemblymember Mike Davis for his work in community activism. At the same time, actor and activist Danny Glover and the Rev. Dr. Amos C. Brown received the 2024 Legacy Hall of Fame Awards, recognizing their lifelong commitments to advancing civil rights.

The convention also offered practical workshops, including “What’s On Your Ballot?,” where coalition leaders provided analyses of California propositions, explaining their potential impacts on community rights and resources. The Voter Turnout Workshop provided background and encouraged participants to promote voter turnout through community-centered outreach strategies.

Sunday’s events closed with a Prayer and Memorial Breakfast honoring the contributions of past and current civil rights leaders.

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Activism

Atty Gen Bonta: U.S. Law Mandating Emergency Care to All Patients Faces Threats

The attorney general highlighted that EMTALA is vital for ensuring that no individual is turned away from emergency services based on financial status or insurance coverage. Bonta stated that the law has been a cornerstone of emergency healthcare for decades, providing peace of mind to millions of Americans who might otherwise hesitate to seek urgent medical attention due to cost concerns.

Published

2 days ago

November 3, 2024

Oakland Post

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By Bo Tefu, California Black Media

California Attorney General Rob Bonta emphasized the critical need to protect the Emergency Medical Treatment and Labor Act (EMTALA), mandating that hospitals provide emergency care to all patients regardless of their ability to pay.

In a recent statement, Bonta highlighted the potential threats to this essential legislation amid ongoing discussions about healthcare accessibility in the U.S.

“EMTALA ensures that no one is denied access to emergency medical care, including abortion care, and this federal law is more imperative than ever following the overturn of Roe v. Wade,” said Bonta.

This decision to support the federal government’s case comes at a time when many healthcare providers are facing pressure from rising costs and legislative changes that could undermine existing protections. Bonta called on lawmakers to reinforce EMTALA’s provisions and to combat any efforts aimed at weakening the act, asserting that equitable access to emergency care is a fundamental right.

He urged state and federal governments to ensure that all Americans, particularly marginalized communities, have the necessary access to emergency services without fear of financial repercussions. The brief indicates the coalition’s commitment to healthcare equity, emphasizing that maintaining strong protections under EMTALA is crucial for safeguarding public health.

As discussions around healthcare policy continue, Bonta remains steadfast in promoting initiatives that protect emergency care access, asserting that everyone deserves timely and appropriate medical treatment in emergencies. His efforts align with ongoing legal and advocacy battles to preserve the rights established by EMTALA in the face of evolving healthcare challenges.

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Alameda County

Access Better Health with Medically Tailored Meals – Transforming Health Through Nutrition for Medi-Cal Patients

Launched in 2018, the Medically Tailored Meals pilot program was designed to help Medi-Cal patients with congestive heart failure by reducing hospital readmissions and emergency department visits by providing tailored meals meeting specific dietary needs. The program’s success in improving health outcomes and reducing costly emergency room visits encouraged the Department of Health Care Services (DHCS) to expand the Medically Tailored Meals program to all 58 counties through Medi-Cal transformation and a new set of services called Community Supports.

Published

7 days ago

October 29, 2024

Oakland Post

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The program’s success in improving health outcomes and reducing costly emergency room visits encouraged the Department of Health Care Services (DHCS) to expand the Medically Tailored Meals program to all 58 counties through Medi-Cal transformation and a new set of services called Community Supports.

Medically Tailored Meals are one of 14 new services offered through Medi-Cal that provide members with access to new and improved services to get well-rounded care that goes beyond the doctor’s office or hospital.

Medically Tailored Meals: Overview

Malnutrition and poor nutrition can lead to severe health outcomes, especially among Medi-Cal patients with chronic health conditions. Medically Tailored Meals aim to improve health outcomes, reduce hospital readmissions, and enhance patient satisfaction by providing essential nutrition.

Key Features:

Post-Discharge Delivery: Meals are delivered to patients’ homes immediately following discharge from a hospital or nursing home.
Customized Nutrition: Meals are tailored to meet the dietary needs of those with chronic diseases, designed by registered dietitians (RD) or certified nutrition professionals based on evidence-based guidelines.
Comprehensive Services: Includes medically tailored groceries, healthy food vouchers, and food pharmacies.
Educational Support: Behavioral, cooking, and nutrition education is included when paired with direct food assistance.

Key Benefits:

Address Food Insecurity: Mitigates poor health outcomes linked to food insecurity.

Support Complex Care Needs: Tailored to individuals with chronic conditions.

Improve Health Outcomes: Studies show improvements in diabetes control, fall prevention, and medication adherence.

Patient Testimonial:

“My diabetes has gotten better with the meals. I’ve kept my weight down, and I feel much better now than I have in a long time. I’m one of the people this program is meant for.” — Brett

Eligibility:

Eligible Populations: Eligible Medi-Cal members include those with chronic conditions like diabetes, cardiovascular disorders, congestive heart failure, stroke, chronic lung disorders, HIV, cancer, gestational diabetes, and chronic mental or behavioral health disorders. Also, those being discharged from a hospital or skilled nursing facility or at high risk of hospitalization or nursing facility placement are also eligible.

Service Limitations: Up to two meals per day for up to 12 weeks, extendable if medically necessary. Meals eligible for reimbursement by alternate programs are not covered.

Cost Savings and Improved Health Outcomes:

Health Outcomes: Research indicates a 22% to 58% decrease in emergency department visits and a 27% to 63% decrease in inpatient admissions among Medically Tailored Meals recipients, translating to significant health care cost savings.

Project Open Hand: A Success Story

Project Open Hand has been a leader in providing Medically Tailored Meals, significantly impacting the lives of Bay Area Medi-Cal patients with chronic illnesses. Since its inception, Project Open Hand has delivered nutritious meals to individuals with diabetes, HIV, and other serious health conditions, demonstrating remarkable health improvements and cost savings.

Key Achievements:

Improved Health Outcomes: Project Open Hand’s research found a 50% increase in medication adherence among recipients of Medically Tailored Meals.

Reduced Hospitalizations: Their program showed a 63% reduction in hospitalizations for patients with diabetes and HIV.

Enhanced Quality of Life: Patients reported better health and increased energy levels.

Project Open Hand ensures that each meal is prepared using fresh, wholesome ingredients tailored to meet the specific dietary needs of its clients. By partnering with Medi-Cal managed care plans, Project Open Hand continues to provide life-saving nutrition to those who need it most.

Join Us in Our Mission

You can experience the profound impact of Medically Tailored Meals by joining the Medi-Cal Community Supports services initiative. Your involvement can make a difference in promoting your health through nutrition.

Learn More

For more information about Medically Tailored Meals and how to get involved, call the state’s Medi-Cal Health Care options at 800-430-4263 or contact your local managed care plan.

In Alameda County, Medi-Cal recipients can contact:

* Alameda Alliance for Health: 510-747-4567

* Kaiser Permanente: 855-839-7613

In Contra Costa County, Medi-Cal recipients can contact:
* Contra Costa Health Plan: 877-661-6230

* Kaiser Permanente: 855-839-7613

In Marin County, Medi-Cal recipients can contact:
* Partnership Health Plan of California: 800-863-4155

* Kaiser Permanente: 855-839-7613

In Solano County, Medi-Cal recipients can contact:
* Partnership Health Plan of California: 800-863-4155

* Kaiser Permanente: 855-839-7613
Your health and well-being are your health care provider’s top priority. Medically Tailored Meals are designed to enhance quality of life by advancing health care through the power of nutrition. Experience the benefits today, and take the first step toward a healthier you.