GRDC News - August 2005

MVP Health Care and Preferred Care to Combine Operations
Larger Subscriber Base Plus Expanded Range of Services
Enhances Regional Health Plan Competition
Combination Creates Major New Not-for-Profit Health Plan

SCHENECTADY, NY – July 29, 2005 – Two of upstate New York’s premier not-for-profit health plans, MVP Health Care of Schenectady and Preferred Care of Rochester, announced today they will seek state approval to combine their programs and create a major new not-for-profit plan serving more than 815,000 members across upstate New York, Vermont and New Hampshire.

“This exciting combination unites two great organizations into one superb team,” said MVP President and CEO David Oliker. “By joining together, we will be able to provide better services for our members, employers and providers, as well as enhanced competition in the health insurance market. This will benefit businesses by creating one of the strongest regional health care insurers in the Northeast.”

“We have had numerous opportunities to combine in the past, but this agreement with MVP is the right one for our members, our employees and our community,” said Preferred Care President and CEO John Urban. “It ensures a strong, highest-quality not-for-profit health care provider in the Rochester area and guarantees continuity for our customers and employees.”

Both MVP and Preferred Care are highly ranked in customer service satisfaction in their respective markets by the National Committee for Quality Assurance (NCQA), the independent auditor and evaluator of health care plans. NCQA ranked Preferred Care among the Top 10 in the United States in customer satisfaction.

Under terms of the agreement:

  • Members of the two plans will see no change in their products and services.
  • Members, employers and providers will continue to call the same telephone numbers and work with the same people from the same offices across the new combined service area.
  • Jobs across the new service area will be preserved. No layoffs are anticipated as a result of the combination.
  • The new combined organization will continue to operate as a not-for-profit. Its board of directors will be a combination of current MVP Health Care and Preferred Care directors.
  • MVP Health Care president and CEO David Oliker will become the President and CEO of the combined company, which will continue to be headquartered in Schenectady.
  • If approved by New York’s Attorney General, a new local foundation will be created that will be dedicated to improving health care in the Greater Rochester area with an endowment of $200 million.

Combinations of health plans can create the critical mass necessary for plans to leverage better rates for such contracted services as pharmaceuticals and medical management programs and to make new investments in information technology that benefit employers, members and providers. This combination will also make it possible to offer a wider range of improved plans to more subscribers, sooner.

The two plans’ service areas are contiguous, with no geographic or service overlap, creating a combined service area covering 42 counties across western, central and eastern New York including both the Southern Tier and the Hudson Valley. Preferred Care’s business is centered in Rochester and western New York, while MVP covers 33 counties in New York and counties in Vermont and New Hampshire.

“Our complementary service areas and service offerings make this agreement as sound a business proposition as there could be,” Oliker said. “It is a true combination of capabilities and offerings and compatible philosophies – like bringing together two all-star players to create a championship team.”

“This is a perfect time to combine,” Urban said. “Both plans are strong and in excellent condition and the proposed combination creates an even stronger one. Combining provides the best way to grow and strengthen each plan’s businesses and offerings for employers, members and providers.”

The proposed combination is subject to approval by the New York State Insurance Department and the New York State Department of Health.

About Preferred Care
Preferred Care is designated a Distinguished Health Plan by J.D. Power and Associates, the premier global marketing information firm, which recognized the local health plan for providing “An Outstanding Member Experience” for its Commercial HMO members. Preferred Care, a managed health care plan, serves the health care needs of more than 265,000 individuals throughout the nine counties of the Greater Rochester region. Its network includes 4,400 physicians and health care professionals and all the local hospitals in the Greater Rochester area. Established in 1979, Preferred Care serves Commercial, Medicare, Medicaid and self-funded HMO plan members. Its Commercial and Medicare Advantage (Preferred Care Gold) plans have earned an “Excellent” NCQA accreditation, the highest rating, for its commitment to quality.

About MVP Health Care
MVP Health Care offers fully insured and self-insured employer health benefits plans, including HMO, point-of-service ( POS ), preferred provider organization (PPO) and indemnity coverage through MVP Health Plan Inc., the MVP Health Insurance Co. and MVP Select Care Inc. Formed in 1983, MVP’s network includes nearly 14,000 network physicians and 115 hospitals. MVP insures 550,000 covered lives in all lines of business. MVP’s HMO and POS plans have earned “Excellent” NCQA accreditation, the highest rating for quality.


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