The Blackstone Group has hired Robert Galvin as the chief executive officer of Equity Healthcare, the firm’s health management programme.
Before joining Blackstone, Galvin served as executive director of health services and chief medical officer for General Electric, responsible for the design and financial and clinical performance of GE’s health programmes. He was also responsible for health policy strategies affecting employees.
Equity Healthcare was created in 2007 to improve quality and contain the costs associated with providing health care to the employees and their families of private equity portfolio companies. The programme currently covers 34 companies, the combined healthcare spending of which exceeds $2 billion annually.
The programme’s architect, Alan Muney – a former executive and chief medical officer at Oxford Health Plans and United Healthcare – saw early on that managing chronic conditions among employees could be a significant driver of cost reductions.
Outside firms can join Blackstone’s purchasing programme for a cost of $2.00 per employee per month. Last year, rival firm TPG became the first outside customer of Blackstone’s programme.
With TPG on board, the Equity Healthcare programme includes 34 portfolio companies, 24 of which come from Blackstone, with 125,000 employees and a total of around 260,000 members including dependents.
Blackstone negotiated with its primary health insurance providers Aetna and Anthem that any savings from this initiative would be passed back to Blackstone. Equity Healthcare is projected to save Blackstone $90 million by 2010 and $140 million by 2011. The programme saved Blackstone $35 million in 2009.