McLaren Health Care to acquire MDWise, expanding reach of provider-run plan

Credit: kennethaw88.

McLaren Health Care in Michigan will run one of the area's largest provider-sponsored health plans when it acquires Indiana health plan MDWise, according to the health system.

Upon completion, revenues for McLaren Health are expected to approach $6 billion annually.

The terms of the deal were not announced.

The move furthers McLaren's participation in provider-sponsored health plans at a time when many health systems are reducing or abandoning similar efforts, the health system said.

[Also: Tracking 2017 mergers and acquisitions]

Together, MDwise and McLaren Health Plan will serve more than 620,000 members, making it one of the region's largest provider-sponsored health plans.

Revenues are expected to approach $6 billion annually for McLaren Health Care, which is headquartered in Grand Blanc, Michigan, and
owns and operates 12 acute care hospitals.

[Also: Priority Health, McLaren expand relationship to include more of their Michigan hospitals]

The transaction is expected to be completed by Dec. 31.

This marks McLaren's first move outside of Michigan.

"In addition to providing a platform for future growth in Indiana, expanding our health plan operations allows us to create greater economies of scale and new opportunities to share data and best practices, all of which will improve the experience of both members and network providers," said McLaren CEO Philip Incarnati.

Earlier this year, the MDwise Board of Directors made a strategic decision to identify a buyer for the health plan whose core capabilities included managing risk-bearing entities, McLaren said.

MDwise is a non-profit HMO that serves more than 360,000 Indiana members and generates in excess of $1.5 billion in annual revenue.

It works with the State of Indiana and Centers for Medicare and Medicaid Services to offer Hoosier Healthwise, Healthy Indiana Plan
and MDwise Marketplace health insurance programs.

McLaren Health Plan is an HMO that provides healthcare benefits to more than 260,000 commercial, Medicaid and Medicare beneficiaries in Michigan.

McLaren will maintain MDwise's Indiana operations. Members will see no change.

"With their strong track record operating a successful health plan in Michigan, they have the expertise needed to assist MDwise to succeed in a rapidly changing managed care market while maintaining a high level of service to our members and provider partners," said MDWise CEO Jim Parker.

Twitter: @SusanJMorse
Email the writer: susan.morse@himssmedia.com