McLaren acquires health plan in Indiana

Acquisition marks first expansion outside Michigan

GRAND BLANC — McLaren Health Care has signed a definitive agreement to acquire MDwise, a non-profit HMO that serves more than 360,000 Indiana individuals and families and generates in excess of $1.5 billion in annual revenue. The transaction, which is subject to state and federal regulatory review and other closing conditions, is expected to be complete by Dec. 31, 2017.

Upon completion of the purchase, total revenues for McLaren Health are expected to approach $6 billion annually.

MDwise will become part of McLaren Health Care, a Michigan-based health system that owns and operates 12 acute care hospitals including McLaren Lapeer Region and McLaren Health Plan, a Michigan HMO that provides health care benefits to more than 260,000 commercial, Medicaid and Medicare beneficiaries in Michigan. Once the transaction is complete, MDwise and McLaren Health Plan will collectively serve more than 620,000 individuals, making it one of the region’s largest provider-sponsored health plans.

“This expansion allows us to leverage the success and strength of our health plan expertise, and brings significant benefits to the individuals and families served by MDwise,” said Philip Incarnati, president and CEO of McLaren Health Care. “In addition to providing a platform for future growth in Indiana, expanding our health plan operations allows us to create greater economies of scale and new opportunities to share data and best practices, all of which will improve the experience of both members and network providers.”

Incarnati told Crain’s Detroit Business that talks have been going on with MDwise for about four months. He said one reason McLaren was selected out of three finalists was because it has experience operating a health plan, physician group and hospital operation.

McLaren will maintain MDwise’s Indiana operations, and MDwise members will not experience any changes to their benefits or provider network. MDwise will continue to offer the same high quality services currently available under its Hoosier Healthwise and Healthy Indiana Plans.

The MDwise board of directors made the strategic decision earlier this year to identify a buyer for the health plan whose core capabilities included managing risk-bearing entities.

“After a lengthy selection process, we are confident McLaren Health Care will be an ideal choice to acquire MDwise,” said Jim Parker, President and CEO of MDwise. “With their strong track record operating a successful health plan in Michigan, they have the expertise needed to assist MDwise to succeed in a rapidly changing managed care market while maintaining a high level of service to our members and provider partners.”

McLaren Health Care, headquartered in Grand Blanc, is a fully-integrated health network committed to quality, evidence-based patient care and cost efficiency. McLaren operates Michigan’s largest network of cancer centers and providers, anchored by the Barbara Ann Karmanos Cancer Institute, one of only 45 National Cancer Institute-designated comprehensive centers in the U.S. McLaren has 24,000 employees and more than 52,000 network providers. Its operations are housed in more than 350 facilities serving the entire Lower Peninsula of the state of Michigan along with a portion of the Upper Peninsula.

Leave a Reply

Your email address will not be published. Required fields are marked *