CEO TALK: UnitedHealthcare NY CEO discusses integration of former POMCO Group as UMR

SYRACUSE — Following its acquisition this past spring by UnitedHealth Group Inc. (NYSE: UNH) POMCO Group is now operating under the UMR brand.

POMCO Group is a third-party administrator (TPA) of self-funded health-care and risk-management plans. Minnetonka, Minnesota–based UnitedHealth Group is the parent company of UnitedHealthcare.

“UMR sits under UnitedHealthcare as the TPA product line,” says Michael McGuire, CEO of UnitedHealthcare NY, who is based in Manhattan.

“UMR pretty much does the same thing and has access to a lot more resources than we did [at POMCO],” says Donald Napier, senior VP of UMR.

Both Napier and McGuire spoke with CNYBJ at the local UMR office at 2425 James St. in the Eastwood section of Syracuse. The property still bears the name POMCO, but will change to the UnitedHealthcare brand “probably by the end of this year,” according to Napier.

UMR — formerly known as United Medical Resources, Inc, — is based in Wausau, Wisconsin, according to a company profile on Bloomberg.com. UMR has about 4,000 employees, says McGuire. The figure includes about 330 in the Syracuse office, according to Napier.

The acquisition

The final acquisition discussions between UnitedHealth Group and POMCO Group started near the end of the third quarter of 2016, but the relationship “started probably seven or eight years ago,” says Napier.

“It was a very good, strategic fit … because of what we could offer and open up space to,” he adds.

UMR has grown through acquisition of TPA businesses and this transaction gives it the upstate New York market, according to McGuire. The former POMCO Group’s clients also have access to “all the things that UnitedHealthcare brings to bear,” he says.

He was referring to smartphone applications, cost “transparency,” and more wellness and disease-management programs.

McGuire declined to disclose any financial terms of the acquisition agreement in the CNYBJ interview.

Pomfrey

Robert Pomfrey, president and CEO of POMCO Group, is no longer involved in day-to-day operations at UMR, but does handle client consulting when needed, says Napier. “He’s on call for us,” he adds.

When asked if the UnitedHealthcare acquisition was a succession plan for Pomfrey, Napier replies that it “was a way so that we could ensure that POMCO could continue … its legacy going forward.”

“UnitedHealthcare is a proven market innovator that brings vast technological and capital resources to ensure investments in our clients, employees, providers and community,” Pomfrey, said in a March 6 UnitedHealthcare news release announcing the deal. “This collaboration will expand UnitedHealthcare’s products and service while also bringing more cost-effective solutions to POMCO clients, members and the Central and Upstate New York regions.”

Jobs impact

When asked if UnitedHealthcare had either cut or added jobs since the acquisition closed more than seven months ago, Napier replied, “both” and noted that it’s “a net gain.” The company cut “a handful” of jobs, “probably 12, 14, and we’re adding 30,” he says.

POMCO Group made headlines when it announced about 90 job cuts in the final months of 2015 from a business unit the firm had created under a contract with Health Republic Insurance of New York, which insurance regulators shut down in late 2015.

That situation wasn’t a factor in the acquisition talks, according to Napier.

“We had conversations when we had Health Republic and things earlier on about doing stuff together … It wasn’t like that was a triggering event,” he explains.

UMR’s client base in Central New York includes the Syracuse City School District and the City of Syracuse, both described by Napier as “long-term” clients.

The customer base also includes other municipalities, schools, and hospitals, some of which are located “downstate.”