Watts Health Foundation Plans to Spin Off Non-Managed Care Operations
After posting $9 million in losses last year, Watts Health Foundation has reached a deal with the Department of Managed Health Care to "spin-off its non-managed care operations," the Los Angeles Times reports. Due to the losses, Watts failed to meet the state's "tangible net worth requirement" for health plans and made the arrangement to "assur[e]" the DMHC that the foundation's HMO would remain in operation. Under the agreement, Watts will transfer 70 health care programs, including community health centers and substance abuse programs, to an undisclosed not-for-profit organization. Clyde Oden, president and CEO of Watts, said that the company is working to reduce costs and hopes to post a surplus by the end of the year. For example, the HMO is in negotiations with hospitals to receive better reimbursement rates in return for "patient volume." Watts, which operates as UHP Healthcare, serves about 100,000 members in Los Angeles, San Bernardino and Orange counties. Approximately 80% of Watts members are Medi-Cal beneficiaries, and 10% are Medicare beneficiaries (Gellene, Los Angeles Times, 7/25).This is part of the California Healthline Daily Edition, a summary of health policy coverage from major news organizations. Sign up for an email subscription.