Humana Inc. announced that its subsidiary, Humana Insurance Company, reached a definitive agreement with the Ochsner Clinic Foundation of New Orleans, La., to acquire all of the outstanding shares of common stock of Ochsner Health Plan.
Ochsner Health Plan is one of the largest health benefits plan in the New Orleans market and the third largest in the state of Louisiana with approximately 152,000 Commercial medical members, primarily in large group accounts, and approximately 36,000 members in the Medicare+Choice program. Ochsner Health Plan is licensed in all 64 of Louisiana’s parishes.
“We are pleased to enter the New Orleans market through the acquisition of Ochsner Health Plan, a company rich in its history of partnering with providers that offer both breadth and depth of skill sets in caring for its members,” said Michael B. McCallister, Humana’s president and chief executive officer. “We are excited to be able to combine Ochsner’s reputation with Humana’s consumer-centric philosophy, and anticipate our innovative products, supported by industry leading tools and technology, to complement the provider experience Ochsner’s customers value today.”
Humana’s presence in the South—an area growing in population and commercial activity—will be significantly enhanced by this purchase. In addition to creating a new Humana market in New Orleans, the Ochsner Health Plan acquisition is expected to facilitate sales opportunities in Humana’s existing Houston market. The acquisition is also anticipated to make Humana more attractive to national accounts.
“The sale of Ochsner Health Plan reflects Ochsner Clinic Foundation’s desire to reinvest its financial resources in its core business of providing excellent medical care to our patients,” said Dr. Patrick J. Quinlan, chief executive officer of Ochsner Clinic Foundation. “We interviewed many companies and specifically chose Humana for its stability and strength. Ochsner physicians will continue to provide care for health plan members as part of a long-term relationship following the sale to Humana.” Ochsner Clinic Foundation will retain ownership of all of its other entities including Ochsner Hospital and 25 clinic locations throughout southern Louisiana.
“The transition should be seamless for Ochsner Health Plan members,” said Terry Shilling, chief executive officer of Ochsner Health Plan. “In fact, we anticipate our members will experience broader products, options, and services as a result of this transaction.”
The transaction, which is subject to regulatory approval, is anticipated to close in the second quarter of 2004. Terms of the transaction were not disclosed.
Humana expects the transaction to be neutral to its earnings in 2004.
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