PRUDENTIAL SELLS HEALTH-CARE BUSINESS.Byline: Ben Sullivan Daily News Staff Writer After seeking a buyer for more than a year, Prudential Insurance Co. of America finally found "Finally Found" was the debut single from the Honeyz. This was their most successful single in the UK and worldwide, securing a number 4 position in the UK singles chart and achieved platinum status in Australia [1] Tracklisting # Title Length one Thursday for its struggling health-care division. Hartford, Conn.-based Aetna, already one of the nation's largest insurers, said it will pay $1 billion in cash and debt for the 6.6 million-member Prudential HealthCare, whose Western headquarters is in Woodland Hills. The proposed acquisition would make Aetna the nation's largest commercial health insurer, with 22.4 million members. By combining the two businesses, Aetna said it expects to achieve annual cost savings of between $130 million and $150 million. The company will achieve that in part by cutting between 1,000 and 2,000 jobs from the combined entity, said Aetna Chairman and Chief Executive Richard Huber, though it will ``rely as much as possible on attrition Attrition The reduction in staff and employees in a company through normal means, such as retirement and resignation. This is natural in any business and industry. Notes: and growth in our business as we streamline operations.'' Aetna has 32,000 employees, while Prudential HealthCare has about 16,000. Prudential spokeswoman Peggy Frank-Lyle said the Woodland Hills regional headquarters will remain open once Aetna owns the division, along with Prudential's four regional administrative centers, one of which is located in downtown Los Angeles Downtown Los Angeles is the central business district of Los Angeles, California, located close to the geographic center of the metropolitan area. The sprawling, multi-centered megacity is such that its downtown core is often considered just another district like Hollywood or . News of the proposed purchase brought relief mixed with concern over the future to local Prudential employees who have been working for more than a year with the knowledge that their employer was up for sale. ``There was a lot of uncertainty,'' said Jorge Martin, a former marketing employee at Prudential who was laid off in a round of cost cutting last year. ``People are taking a wait-and-see attitude. There's nothing imminent, but people think they may be looking for Looking for In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a job a year from now, or two years from now.'' If approved by regulators, the purchase would be the third big buy for Aetna in the health-care arena in the past two years. The company earlier this year bought New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Life's health business for $1.05 billion, and in 1996 purchased U.S. Healthcare U.S. Healthcare is a now-defunct healthcare company. The logo had an apple. The merger with Aetna In 1996, the company merged with Aetna, calling it Aetna U.S. Healthcare. The U.S. Healthcare apple logo was next to the Aetna name, and U.S. Healthcare under it. U.S. for $8.9 billion. Thursday's deal would bring Aetna new members at a cost of less than $200 apiece a·piece adv. To or for each one; each: There is enough bread for everyone to have two slices apiece. [Middle English a pece : a, a; see a , compared with the $500 to $600 it typically costs to win a new customer through advertising and marketing efforts. It paid $600 per member for NYLCare's customers and about $1,000 per member for U.S. Healthcare's. Prudential HealthCare runs managed-care plans in more than 40 metropolitan locations. The proposed purchase would make Aetna among the top-three managed-care providers in New York, Pennsylvania, New Jersey, Texas, Maryland, Florida, Georgia, Virginia and Ohio. In California, however, it would remain behind the likes of Kaiser Permanente Kaiser Permanente is an integrated managed care organization, based in Oakland, California, founded in 1945 by industrialist Henry J. Kaiser and physician Sidney R. Garfield. and Foundation Health Systems' Health Net HMO HMO health maintenance organization. HMO n. A corporation that is financed by insurance premiums and has member physicians and professional staff who provide curative and preventive medicine within certain financial, . For now, the 600,000 California members of Prudential health plans will not be affected by the acquisition, company officials said, and it could take up to two years to fully integrate the two systems. Ultimately, the deal should give members in both companies' health plans a choice of more doctors and services, Frank-Lyle said. Though the Prudential sale was long anticipated - the company had been looking for a buyer since fall 1997 - there was no clear front-runner to make the buy. Both Woodland Hills-based WellPoint Health Networks and Louisville-based Humana Corp. had earlier held talks with Prudential to no effect. WellPoint reportedly balked balk v. balked, balk·ing, balks v.intr. 1. To stop short and refuse to go on: The horse balked at the jump. 2. at the $1 billion price tag and Humana was distracted dis·tract·ed adj. 1. Having the attention diverted. 2. Suffering conflicting emotions; distraught. dis·tract by merger talks with United HealthCare Corp. that eventually proved fruitless fruit·less adj. 1. Producing no fruit. 2. Unproductive of success: a fruitless search. See Synonyms at futile. . Aetna had shown some early interest, but disappointing earnings last year made the deal appear unlikely. A subsequent improvement in Aetna's books looks to have made the difference. Prudential Insurance was prompted to sell its health business after several years of losses at the division. Though generating more than $6 billion in annual revenues, the division has lost money for at least the last five years, $200 million in 1996 alone. Intense cost cutting and more aggressive marketing has helped the plan to a certain degree. In California, managed-care veteran Cora Tellez was brought in in late 1997 as president of the sprawling Western division, which includes California, Colorado, Arizona and Utah, and helped limit losses there to about $5 million in fiscal 1997. But the well-respected Tellez was wooed away last month by Foundation's Health Net HMO, where she now serves as the plan's chief executive. CAPTION(S): chart Chart: Bigger HMOs Aetna Inc. is buying the health care business of Prudential Insurance Company of America for $1 billion. A look at the nation's largest HMOs by enrollment: |
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