MemorialCare To Acquire Medi-Cal Membership From Universal Care

Health System Applying To Become Licensed Insurer

By Joshua H. Silavent - Staff Writer

December 4, 2012 - MemorialCare Health System in Southern California is applying to become a state-licensed health insurer under its newly formed Seaside Health Plan after recently reaching a deal to acquire the Medi-Cal membership and health plan operations of Long Beach-based Universal Care.

Barry Arbuckle, president and CEO of MemorialCare, told the Business Journal that the health system had been contemplating pursuing a health plan license for several years as a way to work more effectively with the growing Medi-Cal population as they move from fee-for-service to managed structure care.



MemorialCare Health System is applying to become a state-licensed health
insurer under its newly formed Seaside Health Plan after recently reaching
a deal to acquire the Medi-Cal membership and health plan operations of
Long Beach-based Universal Care. Divya Joshi, M.D., chief medical officer
of Miller Children’s Hospital, left, and Diana Hendel, CEO of Long Beach
Memorial and Miller Children’s Hospital, are pictured with, from left,
Miller Children’s Hospital patients Alajiah Banks, Sebastian Sanchez-
Beltran and Jorge Barrientos.
(Photograph by the Business Journal’s Thomas McConville)

Arbuckle said MemorialCare considered applying for its own health plan license, but that process would likely have taken 18 months or more. “So we took another route and searched around for a health plan that had a license we could acquire,” he added.

The agreement reached means Universal Care’s license will be cloned, which provides MemorialCare with its health plan operations, including information systems, policies, procedures and employees. Universal Care will retain a behavioral health component, Arbuckle said.

Seaside is expected to be approved as a full service health plan in the spring of 2013 and also will support MemorialCare’s participation in the California Children’s Services (CCS) demonstration projects, Arbuckle said.

“The new capabilities further our role in population health management, accountable care, medical homes, information technology, best-practice medicine and other elements of health reform,” Arbuckle said in a statement announcing the acquisition. “They expand our ability to further partner with health plans, employers, hospitals, physicians and providers to better serve patients and local communities.”

Moreover, the recent acquisition helps to further integrate MemorialCare’s role as a hospital and health system rather than simply a system of hospitals, Arbuckle said. The health system will remain in “continued growth mode,” he added, with plans to add more physician groups and acute care and ambulatory care facilities.

Arbuckle said that the Affordable Care Act (colloquially known as ObamaCare) includes elements that make having a fully integrated health system, with a health plan license, even more useful. But, he added, “If Obamacare hadn’t come about . . . I believe California would still have decided to convert their fee-for-service Medi-Cal and CCS populations into a managed product. It’s, frankly, better healthcare.”

This change, in conjunction with MemorialCare’s transition to a full-service insurer, could potentially help drive down healthcare costs, Arbuckle said. “I think it can because it will allow us to do more integrated care and it will be more seamless,” he added. “We cannot continue this escalation of healthcare costs in the country.”