Entrepreneur plans new South Florida HMO : JOHN DORSCHNER
By: Health Insurance
Submitted: 2009-09-23 12:52:13 | Word Count: 535
While many analysts are concerned about the problems that healthcare reform might create for insurance companies, veteran entrepreneur Miguel ``Mike'' Fernandez announced Monday he's starting an ambitious health maintenance organization that he expects to employ 1,000 statewide -- and may expand nationally.
``Wherever there is turmoil, there is opportunity,'' said Fernandez. ``We have a pretty good history in this area.''
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Fernandez cited how he invested about $3 million in a Medicaid HMO in 1993 and sold it in 2002 for $185 million to Amerigroup. He paid $28 million a Medicare HMO that became CarePlus, which he sold in 2004 for $450 million to Humana. ``A fairly good return.''
Fernandez plans to launch Simply Healthcare Plans in December. The company is filing an application for an HMO license with the state and is preparing paperwork for a Medicaid contract. Next spring, the firm plans on filing for Medicare approval after his noncompete agreement with Humana runs out.
The company will start with offices in South Florida, Tampa and Orlando. Expansion outside the state could come later.
With more than 30 years experience in health insurance, Fernandez said he knows all the problems. ``The last time we started, back in 1993, they said the market was overcrowded and rates were going down. I ignored those reasons and proceeded on ahead.
``The same issues are here today: The markets are overcrowded, the rates for Medicare and Medicaid are coming down. And yet if we provide outstanding service to the customers,'' he expects to once again be a success.
He noted that this time he's starting out with far more capital than he did in the 1990s. The HMO is being funded by $100 million from MBF Healthcare Partners, a venture capital firm Fernandez started in 2005. About $80 million will come directly from Fernandez.
CarePlus thrived in conjunction with 12 CAC clinics, in which Fernandez copied the old Cuban model of providing healthcare in a social atmosphere -- seniors with cafecitos chatting with each other. Fernandez did not rule out clinics this time around, but the HMO will start without them.
He said that some of his old team will be joining him. Already on board is Peter Jimenez, the chief operating officer of CarePlus.
He said many former staffers have expressed interest in joining his new endeavor. Employees shared about $90 million from the sales of his previous insurance companies.
``Because of our track record, we already have more than 300 resumes on file for a wide variety of jobs.''
The new health plan will join other MBF investments, which include Medical Specialties Distributors, OMNI Home Health Services, Navarro Discount Pharmacies and NutriForce Nutrition.
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