UP&UP to purchase health care operator Rockville firm to pay $14.75 million for America's Health Plan

Acquisitions

October 01, 1997|By Mark Guidera | Mark Guidera,SUN STAFF

United Payors & United Providers Inc., a Rockville company that provides health insurers a national network of health care providers, said yesterday that it will buy America's Health Plan Inc. for $14.75 million.

Publicly held UP&UP said AHP, which operates a network of health care providers nationwide, should significantly improve its earnings in 1998.

UP&UP, which employs about 400, posted a net profit of $10.6 million on $35.2 million in revenue in 1996.

Ed Civera, president and chief operating officer of the fast-growing company, which expects to post revenue of about $60 million this year, said the deal is part of UP&UP's plan to selectively acquire preferred provider organizations and other health care outfits as part of a growth strategy.

As it acquires preferred providers in targeted geographical areas of the country, said Civera, the company expects to convert them to its prepayment system, which it believes is a strong incentive for cost saving, while offering physicians and hospitals more control over health care decisions.

America's Health had revenue of $7.3 million for the six-month period ended June 30, 1997, said UP&UP.

America's Health, a privately held Bethesda company, has a network of about 1,500 acute care hospitals and more than 150,000 physicians.

Once the deal is completed, UP&UP said it will have a network of about 3,000 acute care hospitals, 10,000 rehabilitation and out-patient surgical care centers and 170,000 physicians.

The company helps health insurance companies and clients, such as large corporations, shave health costs by offering a national network of health care providers, including hospitals and physicians groups, it contracts with for health services.

UP&UP's contracts with health care providers generally involve what it terms "good capitation" -- prepaid payments based on claims by its clients. Health providers can use the money for whatever resources it deems necessary, but also must assume the risks associated with providing care for large groups, said Civera.

Pub Date: 10/01/97

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