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February 27, 2021
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Business Review Western MI
Business Review Western MI
Priority Health Enters Detroit Market
(2007-01-02)
(wgvu) - The pending acquisition of Care Choices gives Priority Health immediate access to the state's largest market for growth: metro Detroit.


Priority Health has long eyed venturing into the Detroit area, a move that President and CEO Kim Horn says would not have occurred for a long time had Care Choices not become available.


When Care Choices parent corporation Trinity Health approached Priority Health last spring about a possible deal, we didn't have to think about it for very long, Horn said.


This made perfect sense, she said. They were just an absolute complement to us.


Trinity Health signed a deal Dec. 21 to sell its Care Choices HMO and PPO and Preferred Choices PPO health plans to Grand Rapids-based Priority Health, which has been expanding steadily for a number of years with a goal of achieving a statewide presence.


The acquisition would make Priority Health the second-largest health plan in Michigan, with more than 600,000 members, behind Blue Cross Blue Shield of Michigan and ahead of the 524,000-member Health Alliance Plan in Detroit.


Pending regulatory approval, the sale is expected close in 120 days. Financial terms of the deal were undisclosed.


The acquisition is attractive, Horn said, because Priority Health and Care Choices do not overlap geographic markets, have similar corporate culture, are both are owned by health systems and rate highly in quality and customer-service surveys.


Priority Health's strong product development and supporting information technology system will shore up two key areas where Care Choices has been lacking, she said.


A Detroit presence, Horn said, will allow Priority Health to expand enrollments at employers that have locations on either side of the state Fifth Third Bank, General Motors, National City and Meijer Inc. among them. She estimated that about half of the health plan's top 60 employer groups have locations on both sides of the state.


A consistent question, demand and expectation is we be able to provide coverage where they have employees, Horn said.


Priority Health presently has some 460,000 members enrolled in varying health plans across a 44-county market in the Lower Peninsula. The acquisition will add six counties around Detroit to Priority Health's territory Oakland, Washtenaw, Macomb, Livingston, St. Clair and Wayne.


The health plan, majority-owned by Grand Rapids health system Spectrum Health, last year expanded into the Saginaw and Kalamazoo markets and is preparing to seek regulatory approval to move into Battle Creek and additional markets in mid-Michigan, including Midland.


We want to be across the entire state of Michigan, she said.


In Metro Detroit, Priority Health will seek to aggressively expand on the market presence of the 143,000-member Care Choices. Priority Health can immediately bring to the market its small-business and consumer-driven health plans categories where Care Choices lacks products.


We wouldn't go there and not expect to grow share, Horn said. We'll go after the market segment that they previously didn't serve.


Priority offers HMO, PPO, POS, self-funded, fully insured and Medicaid and Medicare products.


Horn expects a 12- to 15-month integration process after the sale closes. Priority Health will maintain a southeastern Michigan regional office and call center in Farmington Hills and centralize many back-room administrative functions in Grand Rapids.


The sale announcement culminates a process Trinity Health started last spring when it began examining options for Care Choices to focus on health care delivery.


The deal is the third sale in recent months of a health plan in Michigan.


Blue Cross Blue Shield's acquisition of M-CARE from the University of Michigan earned regulatory approval last month and Bronson Healthcare Group in Kalamazoo last year sold IBA Health Plans Inc. to Minn.-based UnitedHealth Group Inc.
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