Managed Care Plan Consolidation Continues

Following a trend of acquisitions in the managed care industry, WellPoint Health Networks Inc. one of the nation's largest publicly traded health-care companies, signed a definitive agreement to acquire Rush Prudential Health Plans of Illinois. The transaction is valued at approximately $200 million.

Based in Chicago, Rush Prudential is co-owned by Rush-Presbyterian-St. Luke's Medical Center and New Jersey-based Prudential Insurance Co. of America and is one of Chicago's largest health benefits companies.

"This transaction is consistent with WellPoint's growth strategy in targeted geographies," said Leonard D. Schaeffer, WellPoint's chairman and chief executive officer.

WellPoint said the acquisition will enable its UNICARE plan to offer innovative hybrid products that provide a full spectrum of health benefit plan features. As a result, UNICARE will expand and strengthen its presence in the individual, small and large group markets.

Rush Prudential executives said the acquisition will benefit its membership in Illinois. "All of us at Rush Prudential are excited to join with WellPoint, which is well known for its customer focus and quality service. Rush Prudential has a long history here in Chicago, and we are proud of the growth we have accomplished and the high satisfaction scores we receive from our members, " said Barbara B. Hill, president and chief executive officer of Rush Prudential Health Plans.

"We see attractive growth opportunities with the broad product offerings created by combining with UNICARE," she said.

The transaction, which is subject to a number of conditions, including regulatory approval, is expected to close in the first quarter of 2000.