MM Curator summary
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[MM Curator Summary]: The 2 organizations will a footprint of 800,000 members and a revenue footprint of $7B. And a whole box of toys to play with when it comes to various acquired solutions and provider groups.
Long Beach-based Scan Group, a senior health care nonprofit, and Portland, Oregon-based CareOregon, a managed care nonprofit, have agreed to merge under the new name HealthRight Group.
The merger, which was announced last month, is intended to give both nonprofits more clout in a marketplace for government-funded health care programs increasingly dominated by for-profit managed care providers such as Long Beach-based Molina Healthcare Inc. and St. Louis, Missouri-based Centene Corp., parent of Woodland Hills managed care provider Health Net. The deal is expected to close sometime this year. Scan Group, which has about 1,600 employees, is the parent company of Scan Health Plan, which had revenue of around $3.6 billion last year. It has about 275,000 members, mostly in California but also in Arizona and Nevada. Later this year, it plans to start enrolling people in Texas, pending approvals.
Scan Group’s Long Beach headquarters.
CareOregon has been focused on providing managed care for low-income individuals through government subsidy programs, especially Medicaid. It’s similar to Westlake-based L.A. Care, which provides health care for the nearly 25% of Angelenos who meet low-income thresholds. It has about 515,000 members, with nearly 320,000 of those in various Medicaid plans.
Financial terms of the deal were not disclosed. According to the Dec. 14 announcement, the new combined HealthRight Group entity will have revenues of about $6.8 billion and will serve nearly 800,000 health plan members through its Medicare and Medicaid managed care offerings.
While the announcement did not say where HealthRight Group will be headquartered, its designated chief executive, Sachin Jain, and board chair Linda Rosenstock currently hold those same posts with Scan Group in Long Beach. CareOregon Chief Executive Eric Hunter will retain that post and serve as president of HealthRight’s Medicaid Division.
Jain specifically referenced the aim of gaining more clout in the government-funded health care provider space.
“For far too long, America’s not-for-profit managed care organizations have operated at a scale disadvantage to their larger for-profit competitors,” Jain said. “HealthRight aims to bring together two complementary organizations to benefit from greater scale, while maintaining focus on the people and communities they serve.”
In addition to its health plans, HealthRight will operate a diversified business unit comprising assets from both organizations including Welcome Health, a geriatric home-based primary care medical group; Housecall Providers, an in-home primary and palliative care provider; MyPlace Health, a joint venture between Scan Health and Boston-based Commonwealth Care Alliance; Healthcare in Action, a medical group for people experiencing homelessness; and HomeBase Medical, a medical group focused on improving chronic disease management and palliative care for Medicare beneficiaries.