Cigna Corp. is buying QualCare Alliance Networks Inc. in New Jersey, a managed care company that works with hospitals to improve quality of care and reduce medical costs.
The deal is expected to close in the first three months of this year, the company said Monday. Financial details were not disclosed.
The company, based in Piscataway, N.J., employs about 800 workers and is involved in managing health care for about 200,000 people. The company will become a subsidiary of Cigna.
Combined, the insurer and the managed-care company will contract with hospitals to analyze patient populations, report on clinical performance and management, provide benchmarks for clinical outcomes and provide various types of health-plan administration.
The New Jersey company appealed to Cigna in part because of its experience of more than 20 years and its expertise working inside hospital systems, a Cigna executive said..
“Because this organization and its management team were formed by a collection of hospital systems, and they’ve served hospital systems as their primary client, the first thing is they understand hospitals far better than most do,” said John Wray, senior vice president of Network Contracting and Delivery System Collaboration at Cigna.
Secondly, the New Jersey company, known as QANI, has developed approaches and capabilities that meet the needs of hospitals as they adapt to customers who increasingly demand more choice, personalization and affordability, Wray said.
Health insurers and hospital systems have worked in recent years to improve clinical outcomes and patients’ health while reducing costs. This acquisition brings Cigna closer to managing health systems.
“A lot of the efforts to offer better value to a consumer are focused more on the outside looking in,” Wray said. “This is much more integrated with the strategies and the capabilities that the providers of care are already deploying, developing. And that’s something that gives us the ability to have a greater alignment with the people who are delivering the care to the consumers.”
Cigna plans to use the QANI model to engage hospital systems outside of New Jersey, too.
QualCare Alliance Networks Inc. is the parent company of QualCare Inc., a managed-care company; Qual-Lynx, a workers’ compensation company and third-party administrator for property-casualty and workers compensation; and Health-Lynx, which establishes accountable-care organizations that are a newer model of paying for medical care based on outcomes rather than paying a fee for service.
Date: January 28, 2015