It's been a while since a WellPoint purchase made a major splash as it did with the Anthem merger in 2004 and the WellChoice acquisition the following year. More recently WellPoint's focus has been on adding skills and capabilities to its operating platform, such as an imaging company and data analytics acquisition.
WellPoint's announcement this month that it is purchasing CareMore, a cutting-edge Medicare Advantage HMO in three western states, adds a new layer of expertise and a departure from the company's core business of managing for-profit Blue Cross plans.
While WellPoint is involved in multiple state Medicare markets, it is outgunned by UnitedHealthcare, Humana and Kaiser Permanente in several states. WellPoint has large MA populations in Ohio, New York, California and Indiana, but its Heartland and Mountain state Blue plans haven't made much headway in the MA segment.
CareMore's modest enrollment numbers don't speak to the magnitude of the purchase. Although the Medicare plan enrolls only about 52,000 members, mostly in California, it has a growing presence in Las Vegas, Tucson and Phoenix, which it entered in 2011. The plan performed well in its first open enrollment in Phoenix, drawing almost 3,000 beneficiaries.
Once the sale is completed, WellPoint will own CareMore's 26 clinics in its three states, employing physicians, nurse practitioners, case managers and other providers. The clinics serve as medical homes, coordinating care for members and managing symptoms and comorbidities for the chronically ill. CareMore places heavy emphasis on preventive care, drug adherence and treatment plan compliance to keep beneficiaries out of acute-care settings.
This purchase allows WellPoint to keep up with other national plans and get ahead of the accountable care wave with its own vertically integrated system.
With the sale expected to close before year's end, WellPoint might not leverage CareMore's capabilities fully until 2013. It's still too early to tell whether CareMore's model will spread across WellPoint's geography. The more immediate impact should be in markets where both operate in California and Nevada. Owning brick-and-mortar facilities allows WellPoint to compete with regional provider-owned MA plans and national carriers with strong provider ties.
As Baby Boomers comfortable with managed care retire, WellPoint could turn this purchase into major Medicare enrollment gains. WellPoint competes for top membership share in its 14 Blue Cross states, and many new retirees will have been covered by WellPoint in its commercial plans. Buying, then expanding, the CareMore concept seems a natural move as the elderly population grows and more savings are sought through care coordination.
The CareMore name might end with the sale, but it will have a significant influence on WellPoint's Medicare Advantage future.