Fairview Health ac­quires in­surer Pre­ferredOne

Modern Healthcare - - REGIONAL NEWS - —Me­lanie Evans

Fairview Health Ser­vices has bought out its joint ven­ture part­ners in in­surer Pre­ferredOne. The plan saw sig­nif­i­cant growth af­ter its ini­tial en­try into the Min­ne­sota health ex­change, but left shortly af­ter ex­pe­ri­enc­ing losses.

Min­neapo­lis-based Fairview, which also has a deal un­der­way to in­te­grate the Univer­sity of Min­ne­sota Physi­cians into a newly formed aca­demic med­i­cal sys­tem, ac­quired North Me­mo­rial Health Care’s 25% stake in the in­sur­ance com­pany and the 25% stake held by Pre­ferredOne Physi­cian As­so­ciates.

Fairview was the sole other owner. Fi­nan­cial terms of the ac­qui­si­tion were not dis­closed.

“This new own­er­ship struc­ture strength­ens Fairview’s al­ready ro­bust con­tin­uum of health­care ser­vices, deep­en­ing ca­pa­bil­i­ties that are crit­i­cal in to­day’s health­care en­vi­ron­ment,” David Mur­phy, Fairview’s in­terim CEO, said in a blog post an­nounc­ing the deal. The in­surer has 285,000 mem­bers.

Fairview had the op­tion to buy its part­ners’ shares af­ter the sys­tem loaned Pre­ferredOne $18.75 mil­lion in Oc­to­ber 2014 and guar­an­teed another $40 mil­lion credit line, which the in­surer has since used, ac­cord­ing to fi­nan­cial state­ments. Pre­ferredOne ac­counted for 5.7% of Fairview’s

pa­tient rev­enue in 2014.

The in­sur­ers’ fi­nan­cial losses fol­lowed its en­try into Min­ne­sota’s health in­sur­ance ex­change and it ex­ited the ex­change rather quickly.

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