With its national competitors mired in mergers blocked by the Justice Department, UnitedHealthcare just made a deal for one of the Mountain West’s most innovative regional insurers.
For decades, Rocky Mountain Health Plans has been the dominant insurer in western Colorado. The non-profit carrier has been a coordinated care pioneer for decades, building the same structures as a vertically integrated health plan even as the different parties (plan, provider, health systems, health IT) remained independent.
Rocky does not own hospitals or medical groups, but its boasts incredibly tight relationships with its local providers. The different players don’t always agree, but they always talk. The insurer and its providers partnered to form the Quality Health Network, a health information exchange, to improve connectivity between payer and provider.
Colorado’s insurance market has remained highly competitive, with UnitedHealth, Cigna, Anthem and Kaiser Permanente squaring off for market share, but mostly along the heavily populated Front Range. On the other side of the mountains, Rocky held onto a strong share.
Now UnitedHealth gains a major foothold in western Colorado, a rural region anchored by Grand Junction. Aside from ownership, Rocky’s structure will remain mostly intact. Recognizing a strong regional brand, Rocky Mountain will keep its name as well.
The transaction bears similarity to UnitedHealth’s purchase of Sierra Health Services in Nevada. Almost a decade after that sale shook its local market, Health Plan of Nevada’s brand remains as strong as ever in Las Vegas, due largely to Southwest Medical Associates, Health Plan of Nevada’s vertically integrated medical practice also owned by UnitedHealth. As UnitedHealth has pursued ACO partnerships, Health Plan of Nevada has served as a model for how coordinated care can lower costs.
UnitedHealth’s new subsidiary Harken Health also promotes a community health model not unlike what Rocky has built in Grand Junction and around western Colorado. So there will be many lessons the larger insurer can draw from its new acquisition.
Rocky faced the ACA-related struggles of many mid-sized insurers. Serving a rural population, new business through Connect for Health Colorado, the state-run exchange, hit the insurer with a series of high claims and utilization.
After casting a wide net in the exchange’s early years by selling multiple narrow network projects for different regions, exchange losses forced Rocky to pull back to its home base of Mesa County for 2017 open enrollment.
Rocky has been heavily involved in Colorado Medicaid’s Accountable Care Collaborative, an ACO-like program increasing emphasis on primary care and catching health issues before they grow acute. The health plan participates in Medicaid Prime, a global payment pilot for medical providers that incorporates care management teams and behavioral health into their practices.
The deal helps Rocky get off the mat and boosts UnitedHealth in a new region. Although it becomes part of the nation’s largest insurer, Rocky stands to be an influence to UnitedHealth’s construction of care coordination partnerships.
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