On Friday, Evolent Health said in a statement that the "two parties were unable to reach terms on the related party agreements" and its plan to buy the insurance business was terminated.
Premier said in a statement that it and Evolent were “required by law to announce their intent to enter into an acquisition agreement early on in the process. Sometimes these acquisitions come to fruition during that process, and sometimes they don’t. We look forward to working with Evolent on our value-based health strategy.”
The insurance division, Premier Health Plan, sold Medicare Advantage plans and commercial insurance plans.
The sale would not have affected member benefit changes for the 2018 plan year.
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Evolent has partnered with Premier on the health insurance plan since its launch and stated it will continue to provide services and support for the employee self-insured, Medicare Advantage and commercial large group health plans that Premier will continue to own and operate.
“Premier and Evolent look forward to continuing to collaborate on value-based services covered by their present agreement as Premier continues to explore strategic options for its health plan business,” the press release stated.
Premier Health Plan was first announced in August of 2014 and was launched during a difficult time for start-up health insurance businesses.
Hospital systems across the country dove into the health insurance business after 2010 when the Affordable Care Act created a flood of new customers to buy their policies.
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Hospitals like Premier also continue to be pushed by insurers to become more efficient, and by owning their own insurance companies, hospitals were hoping they would reap the financial rewards that would come from being more efficient.
But insurance start-ups proved to be risky endeavors that almost all of these systems lost money on.
Premier, which had $1.77 billion in revenue last year, has lost more than $40 million on the venture from the start of 2016 through the first half of 2017, according to an independent analyst.
Premier Health Plan had been sold on the Affordable Care Act exchanges, but was among insurers that dropped off the exchanges.
“Key aspects of the Affordable Care Act were either not enacted or drastically changed. This had a direct impact on the ability of the health plan to achieve the level of scale needed,” Premier previously stated.
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