Health Net reviews businesses

May 15, 2009

Analysts speculate Health Net will sell off businesses in key states where it's not the market leader.

Analysts are speculating that Health Net will sell off its businesses in key states where it is not the market leader, including New York, New Jersey, Connecticut and Arizona.

“We are engaged in a strategic review of all our businesses,” according to a Health Net statement. “We have a strong network and a strong base of customers and loyal associates. We are reviewing whether there are potential partnerships with others that will allow us to better serve our customers and strengthen the provider networks that serve them.”

National companies such as UnitedHealth, Aetna and CIGNA operate in many states with lower market share, and this fits in their business model given their true national presence, according to Clive Riddle, president and founder of Modesto, Calif.-based MCOL, a provider of business-to-business health management and managed care resources.

“But for a smaller organization with multi-regional presence, the business model is somewhat different and the business and market pressures are different,” Riddle says. “Thus it is understandable that Health Net would pursue this strategy, but that does not necessarily mean that the national organizations will go down the same path.”