Cone Health Acquires Full Ownership of Medicare Advantage Plan HealthTeam Advantage

Cone Health, a five-hospital system based in Greensboro, North Carolina, has solidified its position in the Medicare Advantage (MA) market by purchasing the remaining ownership stake of HealthTeam Advantage from Novant Health. This strategic move aligns with Cone Health's focus on expanding its insurance offerings and comes amid significant developments in the healthcare landscape.

Acquisition Details and Impact

HealthTeam Advantage, which serves 22,000 members across six MA plans in North Carolina, will now be solely owned by Cone Health. Brendan Hodges, CEO of HealthTeam Advantage, assured members that the ownership change would not affect their coverage or provider networks. While financial terms of the deal were not disclosed, this acquisition marks a significant step in Cone Health's insurance strategy.

The MA plan, originally launched in 2015 as a joint venture with Care N' Care, has undergone several ownership changes. Novant Health acquired a minority interest in 2022 but has now exercised its right to sell its stake back to Cone Health. This transition occurs as Cone Health seeks to strengthen its position in the potentially lucrative but challenging MA market.

Strategic Implications for Cone Health

Cone Health's decision to fully acquire HealthTeam Advantage comes at a time of broader organizational changes. In December, Cone Health was acquired by Risant Health, a nonprofit hospital venture launched by Kaiser Permanente. Risant Health has committed to investing at least $1.4 billion into Cone Health over the next five years, focusing on facility development and system integration.

The full ownership of HealthTeam Advantage aligns with Cone Health's strategy to grow its insurance offerings, particularly in the MA sector. This move allows Cone Health to consolidate its position in a market that, while potentially profitable, has faced challenges in recent years due to rising costs for Medicare seniors and increased regulatory scrutiny on practices such as upcoding.

Industry Context and Competitive Landscape

The acquisition occurs against a backdrop of intense competition and strategic repositioning in the healthcare industry. While Cone Health focuses on expanding its insurance arm, other systems like Novant Health are prioritizing different growth strategies. Novant, for instance, has been concentrating on expanding its medical facilities in the Southeast, competing with Charlotte-based Advocate Health for regional influence.

The MA market itself has been marked by significant turmoil, with insurers grappling with cost spikes that have outpaced reimbursement levels. Additionally, regulators have been working to curb certain practices within the MA space, adding another layer of complexity to operations in this sector.

As the healthcare landscape continues to evolve, Cone Health's full acquisition of HealthTeam Advantage represents a strategic bet on the future of Medicare Advantage plans and the integration of care delivery with insurance offerings. The success of this venture will likely be closely watched by industry observers and competitors alike.