Aetna Completes Medicity Deal

National health insurer Aetna this week announced its formal acquisition of Medicity, a health information exchange technology company from Salt Lake City. The move is seen by many as a proactive approach to meeting health care reform requirements.

The deal between Hartford, Conn.-based Aetna and Medicity was announced Dec. 7, 2010. Aetna confirmed it would cost approximately $500 million to buy Medicity, which will operate as a separate business within Aetna. Medicity’s existing management will remain, report the companies.

Medicity offers a range of products and services to health systems, hospitals, physician practices and health information exchanges that allow providers to securely access and exchange health care information.

Medicity’s connected health care platform for providers, in combination with the clinical decision support capabilities of Aetna’s ActiveHealth Management subsidiary, should provide Aetna with the opportunity to improve the quality and efficiency of patient care for its customers, as well as control health care expenditures, notes the rating agency. Aetna currently provides health care benefits to approximately 35.4 million people across the U.S.

The transaction is expected to be a source of business diversification for Aetna as well as unregulated cash flows, says A.M. Best. In mid-December, as reported in INN, the rating agency issued a rating of “stable” for the insurer.