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Cigna's purchase of QualCare to heat up competition in New Jersey, nationally

Company will focus on value, rather than volume

Top insurer Cigna announced Monday its decision to purchase New Jersey's only hospital-owned source of health insurance, QualCare. The newly formed company one of the largest insurers in New Jersey, according to NJ Spotlight.

This news will no doubt make a big splash in the industry. Cigna has nearly 500,000 consumers in self-funded plans in the state and will most likely add 200,000 to that total with the acquisition of QualCare, noted the article.

Cigna's purchasing decision stems from QualCare's payment method, which pays providers based on value as opposed to the volume, Cigna Senior Vice President John Wray told NJ Spotlight. The insurer is no stranger when it comes to improving the quality of care for its members: Cigna launched its first collaborative care arrangement in 2008 and now has more than 1000 collaborative care programs in place, FierceHealthPayer previously reported.

QualCare will operate as a subsidiary of Cigna. QualCare CEO Annette Catino will retain her role--and she hopes to take the company's business model national, according to NJ Spotlight

"I think that the impact of the announcement obviously remains to be seen, but it has the potential to be disruptive to the market," Linda Schwimmer, vice president of the New Jersey Health Care Quality Institute, told NJ Spotlight. "Cigna nationally has been a leader in the accountable-care-organization work. To the extent that this purchase accelerates that work, it has a lot of potential for change in New Jersey."

This new joint-venture will most likely bring more competition into New Jersey. Now that Cigna is involved, the insurer will bring new customers within New Jersey for QualCare.

"That's enough to be a serious player in the market," Rutgers Center for State Health Policy Director Joel Cantor told NJ Spotlight regarding the newly combined customer base. "We see this trend toward more carriers entering the market and (bringing) more market competition."

For more:
- here's Cigna's announcement
- read the NJ Spotlight article

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