Bright Health Group has entered an agreement to acquire Los Angeles County-based Central Health Plan of California Inc., it announced Wednesday.
Central Health Plan has 42,899 enrollees and sells Medicare plans in five counties in Southern California. Terms of the deal haven't been disclosed, but the price tag is likely large: Central Health Plan had revenue of $489 million in 2019, according to the California Department of Managed Health Care.
"It's a pretty big deal," said Sam Srivastava, Bright's chief operating officer, referring to the deal's size. "We've been working on this for quite some time." The deal is expected to close in the spring.
Central Health Plan was attractive to Bright for a couple of reasons, Srivastava said. For one thing, it had a similar model of care to Bright, which tries to align itself with a small number of providers in each market. Central Health Plan was already owned by Alhambra Hospital Medical Center, so that relationship was already in place.
Bright also liked Central Health Plan's focus on providing care for Asian American and Latino American communities and it hopes to expand Central Health Plan's culturally sensitive methods into other markets, Srivastava said.
"We like the business. Their ability to go deep in a local community ... we find that to be very interesting," he said.
A year ago, Bright announced it was breaking into Southern California with the purchase of Brand New Day, which covers 12 counties. Between the Central Health Plan acquisition, Bright will now cover around 100,000 lives in California alone, Srivastava said.
Bright now covers over half a million consumers across the United States. It offers insurance in more than 50 markets in 13 states. Its revenues exceeded $1 billion in 2020, as executives had suggested it would, though Srivastava declined to get into specifics.
Bright provides care to over 220,000 patients through 40 primary care clinics that it owns in Florida. There's little overlap between patients served through the clinics and people covered by Bright's insurance, Srivastava said, a situation he expects to change as Bright expands the markets where it offers insurance.
“From day one, we made a promise to build a business that served the health care needs of consumers in a new and more personalized way. Deep partnership and alignment with local care delivery organizations is a core component to Bright Health’s disruptive, technology-enabled, alignment model of health care," CEO Mike Mikan said in a statement.
