Who: PHP Healthcare Corp. (Reston, Va.) to create an alliance with HIP Health Plans of New Jersey (New Brunswick)
When: July 24 (announced but pending regulatory approval)
Total Employees: 5,000 (3,000; PHP; 2,000 HIP)
Effect on PR/Marketing: For PHP, the alliance, called Pinnacle Health Enterprises, is expected to more than double its annual revenue of $203.4 million (1996). Also, PHP, which already had momentum in New Jersey through its Blue Cross & Blue Shield affiliation (35,000 members), will significantly strengthen its provider network presence in the Northeast through Pinnacle's exclusive global capitation agreement that will allow the network to manage healthcare services for HIP's 200,000 members.
For HIP, the Pinnacle 20-year agreement, will allow the non-profit HMO to continue to monitor quality of care for its members who will now have access to more than 3,000 community physicians and an additional 10 healthcare centers in PHP's existing network. Since the alliance has not yet been approved, marketing strategy is on hold. But marketing contacts from both companies told us that HIP will still call the shots on its marketing direction.
Alliance Campaign: The internal communications to HIP employees (who would be most affected by the alliance) focused on key messages of the alliance's seamless transition, non-disruption of healthcare services, and enhanced membership access to PHP's healthcare centers. "We had to emphasize [to employees and the public] that HIP will continue to provide all medical and quality oversight," said Bill Rovner, HIP's spokesperson. And, most of PHP's communications involved intense "back and forth" dialogue between PHP and HIP on financial arrangements and assessments of whether the deal made sense, according to Ken Weixel, PHP's executive VP of healthcare strategy. Pending regulatory approval, PHP will pay $73 million to acquire HIP's 18 centers and affiliate businesses. Once the deal becomes final, PHP will provide marketing support for HIP, particularly in membership services.
Alliance Challenges:
- Momentum of alliance is stagnated by regulatory approval process.
- Whether to use existing media vehicles (direct sales brokers and traditional media) to market HIP's expanded membership services, or become more aggressive with nontraditional media.
- Image control, HIP may have to address how its not-for-profit status will be affected by its for-profit affiliation with PHP. (PHP, 703/758-3600; HIP, 908/937-7867)
Other Recent M&As:
- MedPartners, Inc., the nation's largest physician practice maintenance company based in Birmingham, Ala., and InPhyNet, another large physician management organization based in Fort Lauderdale completed its merger June 26. The merger strengthened MedPartners' marketing presence in the South Florida market with 2,500 physicians and over 300 hospital contracts. (MedPartners, Inc., 800/633-0791, ext. 3048; InPhyNet, 423/693-1000)
- Aetna U.S. Healthcare, the nation's leading health and related benefits organization (Blue Bell, Pa.) to acquire Virgina Mason Health Plan, a Washington state HMO based in Seattle. Expected to close in September, the Virginia Mason acquisition will accelerate Aetna's growth in the Seattle area (336 beds and nearly 400 physicians at 22 sites) and allow it to develop a Medicare risk product. (Aetna, 215/283-6890; Virginia Mason Health Plan, 206/583-6451)
Calendar
August 11-13
Winning Strategies for Corporate Communications in Healthcare Organizations; International Quality & Productivity Center. San Francisco, Calif. 800/882-8684.
August 15-19
American Psychological Association annual convention. APA. Chicago. 202/336-6008.
August 25-26
Symposium on Integrated Healthcare; Integrated Healthcare Report and the University of California, Irvine, College of Medicine. Aspen. 909/336-1586.
September 7-10
Congress on Health Outcomes & Accountability; The Zitter Group. Washington, D.C. 800/270-8440.
September 10-13
Second Annual Educational Conference Society for Healthcare Strategy and Market Development. Desert Springs, Calif. 312/422-3738
September 22-23
Branding Health Care. IBC USA Conferences, Inc. Southborough, Mass. 508/481-6400
October 19-21
Second Annual Conference on Technology and Healthcare Marketing. The Alliance for Healthcare Strategy And Marketing. Dallas. 312/704-9700