Duke has held control of WellPath, its health maintenance organization, for more than three years. But as Duke moves along the road to becoming a nationally recognized health system, the two organizations' paths may soon diverge.
WellPath's co-owner, New York Life, is bowing out of its partnership with the Duke University Health System, leaving Health System officials weighing their options for the HMO's future.
Although few of the involved parties are willing to comment, everyone from independent health care consultants to insurance company spokespersons are speculating about whether Duke will sell WellPath, which has over 100,000 members, to an independent insurance company that already owns HMOs.
"I think Duke is getting itself out of the health insurance business and doing what they know best, which is health care," said Stephen Leary, a Raleigh consultant who advises medical practices. "When both sides say they don't comment on these things, that means that they're talking."
Last week, John "Buddy" Dye, senior vice president of Blue Cross-Blue Shield of North Carolina, told The News and Observer of Raleigh that Duke contacted potential buyers for WellPath in the spring. "WellPath put out a request for a proposal," he said. "They were trying to sell the business. We were in a competitive situation. We responded."
Lynn Garrison, a spokesperson for BCBSNC, would neither confirm nor deny earlier reports about any potential discussions.
Dr. Ralph Snyderman, chancellor for health affairs and CEO of the Health System, stressed that DUHS remains committed to the HMO and that it is merely exploring its options.
"When we initiated the development of WellPath, we saw the need for an outstanding community-based health plan," he said. "We are planning to run WellPath and we are totally committed to it."
However, Snyderman did say the Health System could be looking into potential partnerships.
"Since our partner, New York Life, is transitioning out of the health benefit business, we have been making the necessary adjustments to accommodate New York Life's exit and evaluating a wide range of strategic options for the future," he said in a statement.
Frank Mascia, CEO of United HealthCare of North Carolina, an insurance company, said that its Minnesota-based parent company, United Healthgroup, had conversations with Duke a year ago concerning WellPath, though they never came to fruition.
Still, he said, "If there were a way for us to work closely with Duke University, I think that would be terrific."
WellPath refused comment, referring all questions to Duke.
Recently the health care industry has observed the national trend of consolidation of HMOs. Earlier this month, the HMO Kaiser Permanente said it wanted to sell its operations in the Triangle area, and speculation continues about the future of WellPath.
"Clearly that's a big trend in our industry," Mascia said. "You can see it on a state basis and on a national basis."
Some wonder if consolidation will restrict patients' options by reducing the number of competitors.
But Steven White, an executive at Cigna Healthcare, said that healthy competition is still feasible with fewer options. "As long as there are more than three or four choices, it will keep everyone on their toes to provide the best quality [of service]," he said.
John Larsen, president of Managed Care Options in Durham, a consulting and management firm, noted the consolidation of HMOs is a trend that many have anticipated. "People have been predicting it and the prophecy is being fulfilled," he said.
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