UniHealth planned merger with Blue Shield shakey.Deal may snag on Blue Shield Blue Shield A US not-for-profit health care insurer that is a reimbursement intermediary for physicians. Cf Blue Cross. plan for some spinoffs UniHealth's planned merger with Blue Shield, designed to create a giant health care concern capable of offering insurance, managed care and hospital treatment, is in danger of falling through. Officials at UniHealth, the Burbank-based operator of hospitals and health maintenance organizations, confirmed last week that the merger is on the rocks. The sticking point sticking point n. A point, issue, or situation that causes or is likely to cause an impasse. Noun 1. sticking point - a point at which an impasse arises in progress toward an agreement or a goal , a source at UniHealth said, is Blue Shield's reluctance to include all its assets in the merged company. It wants to spin some of its operations off separately. That's not acceptable, UniHealth officials have told employees. The companies have agreed to continue negotiations until next month, but talks are currently at an impasse, and UniHealth officials say they will drop the merger if they can't get an agreement by then. "Some technical issues have come up between UniHealth and Blue Shield," said UniHealth spokesman Ross Goldberg. "If they can be overcome, the deal can go through. If they can't, it won't." Terry Hartshorn harts·horn n. 1. The antler of a hart, formerly used as a source of ammonia and in smelling salts. 2. Ammonium carbonate. , UniHealth chief executive and chairman and president of Cypress-based 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, PacifiCare Health Services health services Managed care The benefits covered under a health contract , was out of town and not available for comment. Blue Shield refused comment on the matter, citing the continuing negotiations. The planned merger of UniHealth, a Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, hospital operator with 1992 revenue of $3.6 billion, and Blue Shield, a statewide insurer with revenue of $6.9 billion, was announced in June. It has been cited by industry analysts as the harbinger of the large-scale consolidations that will occur in the health care industry as President Clinton's reform plan evolves. Combining the two companies was always expected to be a complex task. Goldberg said an eight-member transition team and five separate task forces have been working on the details since June. The first outward signs the merger plan was under stress came six weeks ago, during an employee meeting for CaseCARE, Unihealth's data processing data processing or information processing, operations (e.g., handling, merging, sorting, and computing) performed upon data in accordance with strictly defined procedures, such as recording and summarizing the financial transactions of a branch. Addressing about 200 CaseCARE employees in a meeting room at the Universal Hilton in Studio City on Aug. 31, UniHealth chief information officer Paul Alcala told the gathering Blue Shield wanted to hold back unspecified holdings from the merger and spin them off. Alcala said UniHealth officials were not prepared to approve the proposal, said an employee who attended the meeting. As a result, Alcala reportedly said, the merger talks were at an impasse and the two companies have agreed to continue negotiations until sometime in November. If a resolution is not reached, he reportedly said, the merger will be canceled. "We have 120 other companies lined up wanting to make deals with UniHealth; Blue Shield just happened to be the first one who approached us," Alcala reportedly told the employees. Talks between UniHealth and Blue Shield began in February, but both companies have gotten new CEOs since then. Hartshorn, who would become CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. of the merged company, took over at UniHealth in April. Wayne Moon, former chief operating officer Chief Operating Officer (COO) The officer of a firm responsible for day-to-day management, usually the president or an executive vice-president. of Kaiser Health Plans and Hospitals, replaced interim CEO Peter F. Scott at Blue Shield in August. Blue Shield spokesman Mike Odom said the change of command at that company has not affected the talks. Both companies are not-for-profit entities with for-profit components that, in UniHealth's case, include the PacificCare and Care America HMOs. Together, the two companies represent 4.5 million members. UniHealth also operates 12 hospitals in Southern and Central California Central California can refer to one of several divisions or regions of the U.S state of California:
In an interview last July, Hartshorn predicted revenue for the merged companies would climb to $14.5 billion by the end of the decade. Even if a deal can be reached, Goldberg said, it's unlikely the companies will be able to complete the merger by the scheduled date of Jan. 1. "We wanted to have it all through with by Jan. 1, but now that date seems to be a bit optimistic," he said. "There are still many issues that need to be resolved." Shinkman is a staff reporter with the Orange County Business Journal  An editor has expressed concern that this article or section is .Please help improve the article by adding information and sources on neglected viewpoints, or by summarizing and |
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