An Eye On The Changing Healthcare Climate
Who: HIP Health Plan of Florida (Hollywood, Fla.) assumed the membership of Sunrise Healthcare Plan of South Florida.
When: Effective Sept. 1
Total PR/Marketers: 28 (HIP)
Effect on PR/Marketing: Unlike most M&As HPRMN has covered, HIP neither merged with or acquired Sunrise. Instead, HIP was chosen from a group of six managed healthcare companies to assume Sunrise's 16,000 members located in South Florida. This selection by Florida's Health Maintenance Organization's Consumer Assistance Program (CAP), a non-profit group, boosted HIP's "commitment to the community" stance, according to Steven Chapkin, HIP's senior VP for sales and marketing.
But to keep Sunrise's membership, HIP had to go into high gear with a unique membership marketing program with very little lead time.
Sunrise was found to be insolvent by Florida's Department of Insurance on Aug. 11 and CAP notified HIP of its selection on Aug. 28, leaving the HMO a few weeks to get the word out to Sunrise's plan members, the insurance broker community and the media.
Sunrise, which originally had 50 to 75 employees, was downsized to 10 to 15 staffers after the CAP announcement. Of those employees, there is one marketing person who HIP has not yet worked with.
M&A Campaign: HIP has six months to transition Sunrise's 16,000 members into their plan permanently, after which time members can choose to keep HIP or go to another plan, according to Pamela Adams, HIP's senior VP of corporate development. To make the transition as seamless as possible, HIP set up a telemarketing hotline staffed with 30 telemarketers to contact members and field their questions. HIP also rolled out a direct mail campaign to members, brokers and providers, announcing the new HIP arrangement. (This was especially difficult since Sunrise's database was incomplete.) Ads were also placed in key local newspapers in South Florida.
M&A Challenges:
- Sunrise's vast product line of 15 to 20 plans had to be integrated into HIP's line of four or five plans. "Even though our product offerings are flexible, it's a huge undertaking to move 16,000 people into a somewhat foreign environment who are used to diverse programs," said Chapkin.
- Contacting all of the key audiences -members, brokers and the media - within a short timeframe (two weeks). Some of the brokers were out of town and Sunrise's membership database was incomplete.
- From a pricing standpoint, Sunrise's plan rates were significantly lower than HIP's. (HIP, 954/986-6019)
Recent Key M&As:
- The Carolina Health Network (Columbia, S.C.) completed a joint venture with Medimetrix (Cleveland) for a regional physician-hospital organization (PHO) in South Carolina. (Medimetrix, 800/837-6334)
- Aetna U.S. Healthcare (Blue Bell, Pa.) acquired Virginia Mason Health Plan (Seattle). Virginia Mason's 40,000 members will boost Aetna's PPO and indemnity plan memberships.
- Quorum Health Group, Inc. (Nashville) acquired Methodist Hospital (Hattiesburg, Miss.). This move strengthens Quorum's not-for-profit acute care presence in 13 Mississippi counties. (Quorum, 615/371-4737)