Tufts Health Plan considers a second merger

Tufts Health Plan is considering taking control of a small managed care plan, Network Health, that could help expand its reach into the health insurance market for lower-income people, reports the Boston Globe.

Network Health is owned by Cambridge Health Alliance (CHA) and has recently been one of the few profitable parts of that network. It covers 170,000 low- and moderate-income residents in Massachusetts who use Medicaid, WBUR reports.

Although the details are still being worked out, Tufts would likely become a majority owner of Network Health while CHA would retain an ongoing ownership interest, notes the Boston Business Journal. CHA CEO Dennis Keefe said in a memo to employees that the potential alliance would allow CHA to leverage resources at Tufts that could help the system transform to an accountable care organization and help prepare CHA for an upcoming shift to global payments.

Meanwhile, Tufts announced last month that it's exploring a potential merger with Harvard Pilgrim Health Care. The two have signed a memorandum of understanding. However, Tufts CEO James Roosevelt said his conversations with CHA are "completely separate from any conversations with Harvard Pilgrim Health Care, as we continue to be competitors until a merger process is complete," the BBJ reports.

Stuart H. Altman, professor of national health policy at Brandeis University, said both the Harvard Pilgrim merger and the potential deal with Cambridge Health Alliance show that the pressure to reduce costs is pushing providers and insurers into partnerships.

"It doesn't surprise me. In a lot of ways, I think health insurers are going to have to be more involved in the delivery of care,’" Altman told the Globe. "We're moving toward these highly integrated systems that will be competing against each other.’"

To learn more:
- read the Boston Business Journal story
- check out the Boston Globe article
- see the WBUR piece

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