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UHC and VHA merge to form USA’s largest member-owned health care company

Steve Rogerson
February 5, 2015
 
US national health care network VHA is merging with UHC, the alliance of the USA's leading not-for-profit academic medical centres, to create a single organisation that will be the largest member-owned health care company in the country.
 
The combination of Texas-based VHA and Illinois-based UHC’s gives breadth and depth of data and analytics that they hope will provide members insight into improving the quality and total cost of care. The combined organisation will offer access to leading practices, networking and knowledge sharing among its membership. Financial terms of the deal, which is expected to close by the end of March 2015, have not been disclosed.
 
The combined organisation will provide services to members and will have expertise to serve the needs of independent, community-based health care organisations as well as large, integrated systems and academic medical centres. The company will serve more than 5200 health system members and affiliates.
 
It will provide services to nearly 30 per cent of the USA’s hospitals, including nearly all the academic medical centres and health systems. And it will serve more than 118,000 non-acute health care customers and all the top ten hospitals on the US News & World Reports annual list of America’s Top Hospitals.
 
Together, the organisation will have more than $50bn in purchasing volume, said to be the largest in the industry, and have the industry’s most in-depth clinical data combined with the nation’s most robust supply chain data to address cost and quality.
 
Upon the close of the transaction, the boards of both VHA and UHC have named Curt Nonomaque as president and CEO of the new company. Irene Thompson, president and CEO of UHC, has agreed to accept a leadership position focused on academic medical centre networks during the transition. Marna Borgstrom, president and CEO, Yale-New Haven Health System, will be the board chair, and Ann Madden Rice, CEO of the UC Davis Medical Center, will be vice-chair of the board.
 
“VHA was founded on the idea that health care organisations perform better and faster when working together,” said Nonomaque. “This combined organisation will have even greater ability to harness the power of health care’s brightest minds to provide targeted expertise to improve financial, operational and clinical performance.”
 
VHA and UHC have a long history of collaborations including the formation of Novation in 1998, a joint-venture contracting services company that has grown into the nation’s largest, representing more than $50bn in purchasing volume, and more than $1bn in contract price savings over the past five years.
 
They have also jointly created cost management tools that have led to an additional $1.4bn in savings to members. And they launched Aptitude, the industry’s first online direct contracting marketplace.
 
“UHC and VHA have each helped our members solve their toughest challenges through our innovative products and services,” said Thompson. “With the combination of VHA and UHC, we are creating an enterprise that will be singularly dedicated to the success of academic medical centres, acute and non-acute community health care organisations by providing advanced resources, knowledge and solutions.”
 
The combined organisation will be headquartered in Irving, Texas, with an office in Chicago. A new company name will be announced later.