COVENTRY HEALTH CARE INC. Bethesda, Maryland; Buyouts Drive Growth At Health Plan Operator.(THE NEW AMERICA)

Byline: GLORIA LAU

Hospitals and employers across the U.S. are selling off their HMOs, and that's just fine by the folks at Coventry Health Care Inc.

It runs a hodgepodge of health plans under a range of names, including Coventry, HealthAmerica, HealthAssurance, Healthcare USA, Group Health Plan, Southern Health, SouthCare and Carelink.

The company's growth strategy is heavily dependent on acquisitions. That can be a good and bad thing, analysts say.

"The positives of the Coventry story are that they have not overpaid for what they've acquired, and they've done a terrific job integrating the businesses they've bought," said analyst Todd Richter of Banc of America Securities.

A similar assessment is given by analyst Josh Rashkin of Lehman Bros.

"Coventry appears to have been a very rational buyer in a sometimes irrational environment, demonstrating disciplined management," he wrote in a recent report.