Fairview buys sole stake in insurance holder PreferredOne

The company was one of MNsure’s largest and cheapest providers before they left in 2014 due to financial losses.

Benjamin Farniok

Fairview Health Services took full ownership of Minnesota insurance provider PreferredOne last month.
 
 
The University of Minnesota-partnered health services provider bought the Golden Valley-based insurance company after financial losses led the company to leave MNsure at the end of 2014.
 
 
Before the most recent purchase, Fairview owned 50 percent of the company, while North Memorial Health Care and PreferredOne Physician Associates both owned 25 percent of the company’s shares. 
 
 
PreferredOne CEO and President David Crosby will stay in his position at the company. Fairview declined to give any financial information on the acquisition.
 
 
Regent Darrin Rosha  said he’s waiting to see how Fairview’s new role as both insurance payer and provider will affect the healthcare market.
 
 
David Murphy, Fairview’s interim CEO, said in a press release that PreferredOne adds “expertise in care management, risk management and population health analytics” to Fairview.
 
 
Rosha said a health care provider like Fairview acquiring an insurer is an example of “vertical integration,” which is becoming common in the health care market, and lets providers reach more patients.
 
 
“For us to not be a part of that [integration] makes it challenging to find a large enough patient base,” he said, “Whether or not this is enough to get us there, I don’t know.”
 
 
The purchase did not require approval from the Board of Regents, he said.
 
 
Rosha said he planned on speaking with other Regents who had overseen the acquisition. 
 
 
He said he is unsure about whether the change could affect student insurance. Insurance for students is provided by the University and Blue Cross and Blue Shield 
of Minnesota.