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Mid Atlantic Medical Svcs (MME) Message Board

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  • john_harkes_6 john_harkes_6 Sep 16, 2003 12:46 PM Flag

    Treatment of Sales People

    There is a huge difference in M&A between entry into a market and the current business that company has. In most cases, a healthcare company finds it more difficult to obtain licensure and build a network (especially when you have no members with which to use as leverage for discounts) than to simply acquire an existing company. The NCPPO business was attractive because it had a decent physician network and very good hospital contracts given its current size - particularly its then deal with INOVA. That is why the business was attractive to WLP - not any existing business. Read WellPoint's 10-K - they concentrated on driving large employers out of the MM block because it was underpriced and they suffered significant losses. WellPoint wanted entry to the DC area - in particular the highly desirable and young/healthy growing IT/consulting market in NoVA.

    And if you want to go tit for tat - you claimed all these NCPPO accounts were non-risk arrangements. If that is the case - the financial return from these accounts would be very low.