United HealthCare Expands Presence in Southeast Region

United HealthCare is investing heavily in the Southeast's managed care industry. The Minneapolis-based company intends to purchase HealthWise of America (not to be confused with Utah-based HealthWise, a Blue Cross and Blue Shield affiliate). HealthWise of America, based in Nashville, Tenn., operates HMOs with about 154,000 enrollees in Arkansas, Maryland, Kentucky and Tennessee, and plans to begin enrolling members in Virginia, where it has been granted an HMO license. It also hopes to expand into the nation's capital.

United HealthCare and HealthWise now compete in several markets. Whether to consolidate competing plans will be worked out in the future, say company officials.

Other recent purchases have boosted United HealthCare's Southeastern presence. In October it closed a deal to acquire MetraHealth, which operates in Maryland, Virginia, Kentucky and Washington, D.C., and covers 400,000 lives. After managing the business operations of PHP Inc. of Greensboro, N.C., for several years, United HealthCare absorbed the plan with a stock swap valued at $146 million. In Virginia, United HealthCare recently formed an alliance with the Medical Society of Virginia, with which it will create a statewide managed care plan.

The largest trade group representing the interests of managed care organizations has a new name. The entity formed by the September 1995 merger of the Group Health Association of America and the American Managed Care Review Association now calls itself the American Association of Health Plans, and has chosen a logo that is a semi-abstract image of two hands holding a globe. The Washington, D.C.-based organization's members include about 1,000 HMOs, preferred-provider organizations and other health plans.

— John A. Marcille, Paul Wynn

The benefits consulting firm Towers Perrin forecasts that large employers will pay 3 percent more for health care this year than they did last year, but they won't be able to blame HMOs. On average, there will be no increase in premiums for active employees in HMOs, and costs for retirees in HMOs will drop 3 percent. An individual's enrollment in a Medicare risk HMO can save an employer $1,000 a year.