Coventry Health Care offers health care coverage. Through local health plans, the firm provides health care plans to millions of members in 27 markets primarily in the Midwest, Mid-Atlantic, and Southeast. It offers commercial risk health plans (HMO, PPO, and point-of-service plans) to employer groups and individuals, as well as Medicare Advantage and Medicaid products, prescription drug coverage, and other coverage directly to individuals. The company administers a bit of workers' compensation and provides services such as bill review and case management to insurers and employers. Coventry also administers network rental and pharmacy benefit programs. Aetna has agreed to acquire Coventry.
Aetna and Coventry have agreed on a deal that, between cash and Aetna's assumption of Coventry's debt, will amount to $7.3 billion. Aetna will wind up with a larger Medicaid business and be poised to offer more to local consumer insurance exchanges.
Coventry's local health plans operate under such names as Altius, OmniCare, and, of course, Coventry.
Sales & Marketing
Coventry's plans are offered mostly in small and midsized towns, rather than big cities. Coventry also targets smaller employers and individuals and markets its products through direct sales representatives. Its Medicaid products are marketed through state authorities while its Medicare products are promoted to individuals and groups through direct mail and brokers.
The loss of income from dropping its PFFS product line, combined with an industry-wide drop in managed care premiums, caused Coventry to take a hit in revenue in 2010 of about 16% compared to the previous year. It resumed growth in 2011 with a 5% increase in revenue due in part to the purchase of Mercy Health Plans, which brought a large group of Medicaid patients. However, during 2011 the company's Medicare Part D revenues sank when it lost members that would otherwise have been automatically assigned to its programs.
Itself the product of an acquisition, Coventry prefers to grow its range and reach through a steady rate of acquisitions. Among its targets have been workers' compensation businesses and group health plans formerly owned by health care systems.
The company also adds new products: To reverse a trend of declining enrollment in Part D programs, in 2012 the company created a new Medicare Part D plan with preferred pharmacy providers intended to attract more members to its programs.
While the company has placed a great deal of its future growth upon government health plans, in 2009, Coventry chose to shed its Medicaid and pharmacy benefits administration business First Health Services. Coventry sold the subsidiary to Magellan Health Services for some $110 million. That same year Coventry decided to stop offering Medicare Advantage Private-Fee-for-Service (PFFS) plans, instead choosing to focus on the more cost-effective Medicare Advantage offerings.
Mergers & Acquisitions
An example: in 2012 Coventry purchased Family Health Partners, a Medicaid health plan that The Children's Mercy Hospital in Kansas City had operated. The deal helped the company grow its presence in Kansas, Kentucky, and Missouri and included a long-term partnership whereby Children's Mercy will provide physician and hospital services to Coventry members.
A similar deal was struck in 2010 when the company purchased Mercy Health Plans from Sisters of Mercy Health System to expand its presence in Arkansas and Missouri. In that deal, Coventry bulked up its operations in Missouri and surrounding areas including northwest Arkansas and entered into a long-term relationship with that health system. Mercy Health Plans was absorbed into the Coventry organization the following year; most of its operations are now contained within the Coventry Health Care of Missouri division.
Coventry Health Care was created in 1998 when Coventry Corporation acquired Principal Financial Group's health care unit, thus doubling in size. – less