Catholic Health Initiatives has decided to divest its health insurance business, according to recent financial documents from the Englewood, Colo.-based system.
CHI's insurance subsidiary QualChoice Health, formerly known as Prominence Health, offers Medicare Advantage and commercial insurance products to members in six states. The health insurance business lost nearly $97 million from operations in the first nine months of fiscal year 2016, which ended March 31. In the same period of fiscal 2015, QualChoice recorded an operating loss of nearly $19 million.
Due to those losses, CHI cut staff at QualChoice in March. In May, CHI executives decided to "exit the health insurance business" and are currently "exploring options to sell" QualChoice, according to the financial documents.
CHI is one of many systems across the nation that has launched a health plan in recent years. Between 2010 and 2014, the most recent year for which data is available, the number of providers offering health plans steadily increased from 94 to 106, according to a report by McKinsey & Co. However, financial performance of provider-led plans remains mixed. Of the 89 plans analyzed for the McKinsey & Co. report, more than 40 had negative margins in some or all of the past three years.
CHI ended the first nine months of fiscal 2016 with an operating loss of $265.6 million on revenue of $12.2 billion. In April, S&P and Moody's Investors Service lowered their ratings on CHI's debt due to the system's persistent losses.
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