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HEALTHSPAN, MEDICA MERGING TO CREATEINTEGRATED HEALTH CARE DELIVERY SYSTEM

 MINNEAPOLIS, Dec. 7 /PRNewswire/ -- Medica and HealthSpan Health Systems Corporation announced today their plan to merge the two organizations to form Allina(SM) Health System, a not-for-profit, integrated health care delivery system.
 The merger will align the strengths and consolidate the resources of two of the largest nonprofit corporations in Minnesota. Medica's managed care organization has over 550,000 enrollees who receive care from more than 5,000 physicians. HealthSpan is a diverse health care delivery system of more than 3,200 affiliated physicians, hospitals, clinics and health-related services. The organizations will continue to serve Minnesota and regions of Wisconsin, North and South Dakota.
 The new organization will be managed through an Executive Office, consisting of Gordon Sprenger, executive officer of HealthSpan, as executive officer of Allina, and K. James Ehlen, M.D., CEO and chairman of the board of Medica, as president of Allina. The executive officer and the president, as members of the Executive Office, will work closely with each other to ensure the successful integration of the new organization. As chair of the Executive Office, Sprenger will be accountable to the Allina board of directors for the performance of the Executive Office and will have responsibility for the company's finance, administration, planning and support functions. Ehlen will be responsible for the integrated service network, Allina's managed care products, hospitals and other delivery sites and its physician organization and relations.
 The Allina board of directors will be comprised of half Medica- designated members and half HealthSpan-designated members, with planned board membership to be 50 percent physicians. Chairman of the board of Allina will be a practicing physician from the Medica board, and chair of the executive committee will be a HealthSpan board member.
 "Allina will be a customer-driven organization committed to improving the health care status of communities throughout the Upper Midwest," said Sprenger. "The community will benefit from improvements we'll make throughout the new organization to eliminate unnecessary administrative costs and paperwork, improve the quality of care we provide, simplify access to health care and help physicians provide the best possible care to our patients."
 "The new corporation will support the development of stronger partnerships with physicians and other health care providers, who will share responsibility with us for improving the health status of the communities we serve," said Ehlen. "Allina providers and their patients will benefit directly from our emphasis on clinical rather than administrative management.
 "Our members and patients will also benefit from cost savings we expect to realize through improvements in the way health care is delivered and administered in this new organization," Ehlen continued. "Initially, Allina expects to cut millions of dollars in health care costs by eliminating duplication of technology and effectively managing information systems."
 "Allina is a direct response to MinnesotaCare legislation that encourages the formation of integrated service networks," Sprenger concluded. "This new corporation will exceed the expectations of both state and federal health care reform and will truly lead Minnesota into the next generation of health care delivery."
 Medica and SelectCare members will experience no change in their medical plan benefits or care providers as a result of the merger. Both organizations will retain their current relationships with physicians, clinics and hospitals and other health plans under the new corporate structure.
 Both organizations are currently conducting due diligence in preparation for completion of the merger after all legal and regulatory requirements have been satisfied.
 -0- 12/7/93
 /EDITOR'S NOTE: Allina pronunciation: "a li' na"/
 /CONTACT: Carol Hobart of HealthSpan, 612-574-7850, or, after hours, 612-861-1158; or Suzanne Bluestein of Medica, 612-936-6974, or, after hours, 612-942-9687/


CO: Medica; HealthSpan Health Systems Corp.; Allina Health System ST: Minnesota IN: HEA SU: TNM

AR-BM -- CL004 -- 1197 12/07/93 10:13 EST
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Publication:PR Newswire
Date:Dec 7, 1993
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