Kaufman Hall Facilitates Gundersen Health Plan and Unity Health Insurance Partnership Exploration
Unity Health Insurance (Unity), an affiliate of University of Wisconsin Health (UW Health), and Gundersen Health Plan (GHP), a subsidiary of Gundersen Health System (GHS) have finalized a merger that combines the two managed care organizations. Through the combined entity, the two organizations will now be operated by a consolidated management team. Kaufman Hall served as the exclusive financial advisor to both GHS and UW Health.
The business combination encompasses approximately 270,000 members and more than $1 billion in revenue and creates a stronger provider-sponsored health plan option for current and future members. The goal of the partnership is to extend a provider-sponsored health insurance option where care decisions are made by local clinicians. The business combination also allows GHS and UW Health to manage the health of larger populations. Together, the organizations offer a wide array of products and services and have insurance licenses in Wisconsin, Iowa, and Minnesota.
In its role as facilitator, Kaufman Hall developed a detailed work plan for a series of joint meetings with both parties, prepared each side for the meetings, identified key issues, led joint discussion sessions, developed the business case for the partnership, drafted the initial Letter of Intent, and facilitated the negotiations of all major transaction documents.
As the healthcare industry goes through a major paradigm shift towards a value-based reimbursement, employers and payers have begun to demand a health plan solution with broader geographic and product reach. As the sponsoring health systems, both GHS and UW Health recognize the importance of focusing on the appropriate number of lives to deliver care in a value-based reimbursement environment. GHP and Unity share a common belief that provider-sponsored health plans offer an optimal health insurance option in which care decisions are made locally by clinicians in a coordinated fashion with the health plan. The vision of the GHP and Unity combination is to form an entity that will enhance and expand provider-sponsored health insurance in the state of Wisconsin and beyond.
“The healthcare industry, particularly the health insurance industry, has gone through fundamental changes during the past few years,” said Terry Bolz, President and CEO of Unity Health Insurance in a joint press release issued on January 29. “These changes have allowed us to look at how we are currently doing business and identify opportunities to adapt for continued success and future growth. An alignment creates an opportunity for us to remain administratively efficient while we deal with regulatory requirements, technological investments and new product requirements necessary to become stronger in the rapidly changing healthcare environment.”
“Both Gundersen Health Plan and Unity Health Insurance provide excellent health insurance and service to our respective members and communities,” said Dr. Gary Lenth, CEO and Medical Director of Gundersen Health Plan, in the same joint press release. “We believe that a partnership between these health plans will draw upon the best of both organizations to enhance our ability to meet future challenges and continue this tradition of service and excellence.”