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Oxford Grows as Industry Shrinks
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Business New Haven
2/4/2002
By:
Susan Cornell
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Oxford Health Plans Inc. (NYSE: OHP) is mounting a major expansion in central Connecticut with the acquisition of Hartford-based Medspan Inc., Connecticut's only provider-sponsored managed health-care organization, for about $19 million. A major deal announced in December will more than double the company's commercial (employer-based) membership in Connecticut and give OHP a significantly enhanced toehold in the Hartford area.
However, this will further reduce the number of competing health insurers in the state, and will end the independence of Connecticut's only plan that health care providers had sponsored. Executives of the two companies said that the deal is not driven by cost-cutting.
Trumbull-based Oxford has roughly 80,000 members who live in Connecticut, although only 57,000 of them are in the Connecticut-licensed health plan. The rest belong to Oxford's New York plan, primarily because they work in New York. MedSpan's focus is New Haven and Hartford counties. MedSpan has 74,525 commercial (employer-based) members, and serves a total of 114,000 people. The acquisition would raise commercial enrollment in Oxford's Connecticut plan to 130,525. Additionally, the deal gives Oxford a preferred provider (PPO) network of doctors and hospitals in this state.
Additional acquisitions might be possible, although Oxford wants to remain a “highly focused regional company,” said Charles G. Berg, the company's president and chief operating officer. “There aren't a whole lot of opportunities, but if there are others that are strategic or contiguous, we'll take a look at them.”
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