Coventry Health Care

Coventry Health Care, Inc. was a United States health insurer and managed-care company founded in Nashville, Tennessee, in 1986 by Phil Bredesen. The company developed through a combination of organic activity, mergers, and acquisitions in several major publicly funded and commercial health-care segments. Its business included medical insurance, Medicare prescription-drug coverage, and Medicaid-related managed-care services. A major early turning point came in August 1998, when Coventry merged with Principal Health Care. The combination expanded Coventry's managed-care platform and was followed by the relocation of the company's headquarters to Bethesda, Maryland. Coventry subsequently used acquisitions to add regional membership and capabilities. In October 2000, it purchased WellPath, the managed-care subsidiary of Duke University Health System, for $20.7 million. In October 2010, Coventry acquired MHP, also known as Mercy Health Plans, which served approximately 180,000 members in Missouri and northwest Arkansas. In January 2012, it acquired Children's Mercy's Family Health Partners, further extending its participation in Medicaid and related public-program insurance markets. By the time of its acquisition, Coventry reported approximately 3.7 million medical members, 1.5 million Medicare Part D members, and 900,000 Medicaid members. This membership mix reflected a diversified health-insurance model spanning employer and individual medical coverage, Medicare prescription-drug plans, and Medicaid managed care. The company operated in the highly regulated United States health-insurance sector, where scale, provider relationships, government-program contracts, claims administration, and regional market presence were central competitive factors. Aetna agreed to acquire Coventry in May 2013 for approximately $5.7 billion. The transaction ended Coventry's independent existence and incorporated its operations into Aetna. Following the acquisition, Aetna outsourced all information-technology work associated with the business and laid off thousands of key personnel, according to the referenced account. Coventry therefore survives primarily as a historical corporate and insurance brand rather than as an independent operating company.

Coventry Health Care was established in 1986 in Nashville, Tennessee, by Phil Bredesen. It entered the United States health-insurance sector as a managed-care business and later built a broader platform covering medical insurance, Medicare prescription-drug plans, and Medicaid-related services. In August 1998, Coventry merged with Principal Health Care. The transaction was an important expansion of the company's managed-care operations, and Coventry moved its headquarters to Bethesda, Maryland, after the merger. The new organization continued to grow through targeted acquisitions in regional and specialized insurance markets. In October 2000, Coventry acquired WellPath, the managed-care subsidiary of Duke University Health System, for $20.7 million. The purchase added a health-system-affiliated managed-care operation to Coventry's portfolio. A decade later, in October 2010, Coventry acquired MHP, also known as Mercy Health Plans. MHP was an insurer serving approximately 180,000 members in Missouri and northwest Arkansas, giving Coventry a larger presence in those regional markets. Coventry continued its expansion in public-program insurance. In January 2012, it acquired Children's Mercy's Family Health Partners. The transaction strengthened the company's participation in health plans associated with Medicaid and family-oriented public coverage in the relevant market. Before its sale, Coventry reported approximately 3.7 million medical members, 1.5 million Medicare Part D members, and 900,000 Medicaid members. These figures illustrate the scope of the company at the end of its independent history and the breadth of its insurance portfolio. Rather than relying on a single product category, Coventry combined commercial medical insurance with prescription-drug coverage and government-sponsored managed-care programs. Aetna acquired Coventry in May 2013 for approximately $5.7 billion. The deal brought Coventry's membership, contracts, and operations into Aetna and ended Coventry as a standalone company. The referenced account states that Aetna subsequently outsourced all information-technology work and laid off thousands of key personnel. After the acquisition, Coventry ceased to function as an independent corporate brand.

1. 2013Acquisition by Aetna

   Aetna acquired Coventry in May for approximately $5.7 billion, ending Coventry's independent corporate existence.

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2. 2012Family Health Partners acquisition

   Coventry acquired Children's Mercy's Family Health Partners in January.

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3. 2010MHP acquisition

   Coventry acquired MHP, or Mercy Health Plans, an insurer with approximately 180,000 members in Missouri and northwest Arkansas.

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4. 2000WellPath acquisition

   Coventry purchased WellPath, the managed-care subsidiary of Duke University Health System, for $20.7 million.

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5. 1998Merger with Principal Health Care

   Coventry merged with Principal Health Care in August and moved its headquarters to Bethesda, Maryland.

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6. 1986Company founded in Nashville

   Phil Bredesen founded Coventry Health Care in Nashville, Tennessee.

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A diversified American managed-care insurer combining commercial medical coverage with Medicare prescription-drug and Medicaid programs, supported by regional acquisitions and government-program participation.

• Commercial medical insuranceMedical insurance

  Coventry's medical-insurance business formed the largest reported part of its membership base. It provided health-plan coverage within the United States and relied on managed-care structures, insurer-provider relationships, and administrative services typical of the American health-insurance market.

• Medicare Part D plansMedicare prescription-drug insurance

  Coventry offered Medicare Part D prescription-drug coverage. The company reported approximately 1.5 million Medicare Part D members before its acquisition by Aetna, making prescription-drug insurance a significant component of its overall portfolio.

• Medicaid managed-care plansMedicaid managed care

  Coventry participated in Medicaid-related managed care through regional health plans and acquisitions, including Family Health Partners. It reported approximately 900,000 Medicaid members before the Aetna transaction.

• 2013Sale to AetnaM&A

  Coventry's scale across commercial medical, Medicare Part D, and Medicaid coverage made it an acquisition target in the consolidating United States health-insurance industry.

  What changed. Aetna acquired Coventry in May 2013 for approximately $5.7 billion.

  Aftermath. Coventry ceased to operate as an independent company. The referenced account also reports subsequent outsourcing of all IT work and layoffs affecting thousands of key personnel.

  Acquisition value. $5.7 billion (May 2013)

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• 2012Purchase of Family Health PartnersM&A

  Coventry expanded its public-program and family-oriented health-plan presence.

  What changed. The company acquired Children's Mercy's Family Health Partners in January.

  Aftermath. The deal increased Coventry's participation in Medicaid-related managed care.

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• 2010Purchase of MHPM&A

  Coventry continued to build regional membership in the United States health-insurance market.

  What changed. Coventry acquired MHP, also known as Mercy Health Plans, in October.

  Aftermath. The acquisition added an insurer serving approximately 180,000 members in Missouri and northwest Arkansas.

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• 2000Purchase of WellPathM&A

  Coventry sought to expand its managed-care operations through the acquisition of a health-system subsidiary.

  What changed. Coventry acquired WellPath, the managed-care subsidiary of Duke University Health System, for $20.7 million.

  Aftermath. WellPath became part of Coventry's managed-care portfolio.

  Acquisition price. $20.7 million (October 2000)

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• 1998Merge with Principal Health CareM&A

  Coventry pursued a combination with Principal Health Care as part of its expansion in managed care.

  What changed. The companies merged in August 1998, after which Coventry moved its headquarters to Bethesda, Maryland.

  Aftermath. The merger expanded Coventry's organizational base and preceded further acquisition-led growth.

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• 2013Coventry Health Care acquired by Aetna

  Aetna acquired Coventry Health Care in May 2013 in a transaction valued at approximately $5.7 billion, ending Coventry's operation as an independent insurer.

  M&A
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• 2013Coventry outsourced IT work after Aetna acquisition

  Following the acquisition, Aetna outsourced all information-technology work associated with Coventry and laid off thousands of key personnel, according to the referenced historical account.

  Leadership changeOther
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1. Coventry Health Care