- Two Midwest healthcare organizations, Minnesota-based Medica and SSM Health, are launching a joint venture, the companies confirmed to Healthcare Dive following a Wednesday announcement.
- Medica, a nonprofit insurer, will invest an undisclosed sum in Dean Health Plan, a subsidiary of St. Louis-based SSM Health — one of the nation's largest nonprofit health systems — to enhance services and products.
- The two will retain their separate brand identities and the agreement is expected to be finalized during the fourth quarter pending regulatory approvals.
Healthcare consolidation has continued at a steady pace even amid the volatility spurred by the COVID-19 pandemic.
Analysts expect hospitals, both for-profit and nonprofit, to continue M&A at a robust clip following the pandemic, according to a Moody's Investor Service report. And payers also have been active in dealmaking, scooping up complementary businesses. For example, Humana has acquired the remaining stake in Kindred, a giant in the home-health space, in a deal completed on Wednesday.
Cigna's health services business said in February it was acquiring telehealth vendor MDLive in an attempt to capitalize on telehealth services that have been in high demand since the onset of the pandemic. And Molina has continued to buy up health plans to expand its core business.
However, Medica and Dean Health Plan are not calling the "strategic relationship" an acquisition or merger. Instead, they characterized it as a joint venture between Medica and SSM Health that will still need regulatory approval.
Medica covers almost 1 million people across nine states throughout the Midwest. Employer-based coverage is by far its largest segment, insuring about 594,000 people, according to the nonprofit insurer's 2020 annual report. Medica sells Medicare, Medicaid and individual and employer-sponsored plans.
Meanwhile, Dean Health Plan covers 500,000 people across four Midwestern states.