Health insurers diversify away from regulations

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One year after President Obama signed the health reform overhaul, health insurers are buying less-regulated companies in a bid to offset the lower profits and growth they expect the law to cause.

The Washington Post and Kaiser Health News tallied 2010 purchases by major health insurance companies.

Minnesota-based UnitedHealth Group bought ChinaGate, which helps launch medical treatments in China; Picis, a vendor of clinical and financial management systems for hospitals; Wellness, a medical screening company; and six other firms. Other major health insurers have followed suit.

Hartford-based Aetna Inc. acquired Salt Lake City-based Medicity, a business that helps hospitals share patient information.

Louisville-based Humana Inc. bought Concentra, a Texas-based provider of urgent-care clinics in 40 states, as well as a health coaching firm that helps employers keep workers healthy.

And Philadelphia-based Cigna Corp. is looking overseas and plans to begin selling comprehensive health insurance plans to individuals in China in hopes of capitalizing on its burgeoning middle class.

Indianapolis-based WellPoint Inc. was not mentioned in the article, although it already has business ventures going in China as well as in firms that are tangentially related to health insurance.

Analysts foresee health insurers replaying a bit of their managed care strategy from the early 1990s by acquiring health care providers, in a bid to control medical spending. At the same time, health insurers are trying to grow their presence in the burgeoning business of providing information technology services to or based on the practices of health care providers.

"If you're a health plan, you either become a care-delivery system or an information-services company," said David Brailer, a former George W. Bush administration health official who now leads an investment firm. "The traditional business is dead."


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