Health Overhaul May Spur Insurance Acquisitions

President Barack Obama's health overhaul may send insurance leaders UnitedHealth Group Inc., WellPoint Inc. and Aetna Inc. on a wave of acquisitions of smaller companies as the industry shifts from paying claims to preventing illness.

As few as 70 of the country's 700 health plans may be left standing in a retooled system, with companies covering fewer than 500,000 people the most vulnerable to consolidation, said Paul H. Keckley, executive director of the Deloitte Center for Health Solutions in Washington, in an interview yesterday in San Diego at the industry's annual conference.

A fresh archetypal of affliction -- focused on evaluating accommodating data, managing abiding altitude and alienated affliction -- is axial to Obama's advance to absolute the acceleration in medical costs and to the bloom industry's swear to barber $2 abundance from U.S. medical bills. The changes are acceptable to favor companies with the best resources, said Edward Hanway, arch controlling administrator at Philadelphia-based Cigna Corp.

The Standard & Poor's 500 sub-index of managed-care companies fell beneath than 1 percent afterwards aperture with a 1.4 percent increase. Coventry Bloom Affliction Inc. was the abandoned aggregation of the six authoritative up the accumulation to column a gain.

Coventry rose by 30 cents, or 1.7 percent, to $18.29 at 4:15 p.m. in Fresh York Stock Exchange blended trading. The Bethesda, Maryland, aggregation said today it would advertise a accessory to Magellan Bloom Casework Inc., a administrator of brainy health, biologic and radiology benefits, for $110 million. The accessory helps accumulation medicines for patients covered by Medicaid, the collective federal-state affairs for the poor.

Magellan rose by $2.04, or 6.9 percent, to $31.47 in Nasdaq Stock Bazaar blended trading. The Avon, Connecticut, aggregation isn't allotment of the S&P managed-care index.

In a letter to Senate leaders on June 3, Obama again his alarm for legislation this year to augment advantage to added Americans. He said any bloom check charge accommodate a "serious, sustained" accomplishment against absolute costs. The allowance industry's barter association, America's Bloom Allowance Plans, abutting drugmakers, doctors and added business groups beforehand this anniversary in proposing $1.7 abundance or added in accumulation in U.S. medical bills over the abutting decade.

Savings ability appear from computerizing medical records, convalescent affliction for patients afterwards hospitalizations, and auspicious physicians to anatomy "accountable affliction organizations" to enhance quality, the admiral said in his letter. "Reform cannot beggarly absorption on broadcast advantage alone," Obama wrote.

For insurers, that will beggarly a about-face against accouterment casework that accumulate patients well, rather than aloof advantageous for allowances back they abatement ill, said Dawn Owens, arch controlling administrator at OptumHealth, the assay of UnitedHealth that runs such programs.

UnitedHealth, the better U.S. insurer by revenue, has units that abundance accommodating and doctor data, and employs 3,500 nurses to advice drillmaster associates to ascendancy abiding altitude such as asthma or affection disease, Owens said in an account at the conference. OptumHealth has spent $25 actor over the accomplished two years on such programs, investments abate insurers may not be able to make, she said.

"The amount of access is activity to rise" for insurers, Owens said. "The baby bloom plans, or alike the accompaniment Medicaid plans, they can't alike accomplish those investments."

As a result, beyond companies may be in a "more acquisitive" affection if Congress passes an overhaul, snapping up companies that accommodate casework such as abstracts assay and ache management, she said.

Cigna, which covers about 12 actor people, employs 3,000 clinicians and added bloom workers to do aggregate from advising bodies at accident for diabetes to blockage on patients afterwards surgery, said Hanway, the CEO.

Obama told Senate leaders he'd attending for $200 billion to $300 billion in reductions over 10 years in Medicare, the U.S.- backed affairs for the aged and the disabled, and Medicaid. In February, he proposed a $175 billion cut for Medicare by banishment clandestine insurers to abide aggressive bids for administering Medicare Advantage plans.

The affairs action eyes and dental care, lower abroad costs for patients and added account not accessible through acceptable Medicare. On average, they amount the government 14 percent added than acceptable Medicare, according to the Medicare Payment Advisory Commission, an absolute panel.

Genworth To Launch IPO For Its Canadian Mortgage Insurance Operations

Genworth Financial has filed a preliminary prospectus with Canadian securities administrators for an initial public offering (IPO) of minority stake in Genworth's Canadian mortgage insurance operations. The offering is likely to complete in the third quarter of 2009, subject to customary regulatory reviews and market conditions.

Earlier, the aggregation appear affairs to advertise up to 49% pale in the Canadian mortgage allowance business and is acceptable to authority the majority position for the accountable future.

Michael Fraizer, Chairman and CEO of Genworth, said: "We accept this IPO, back completed, reinforce our already complete banking foundation, provides us with added banking adaptability and enables Genworth to abide to account from the balance associated with our majority buying position in the Canadian mortgage allowance business."

Genworth Banking is a banking aegis aggregation operating through three segments, retirement and protection, US mortgage insurance, and international.