Inglewood HMO Sues Rival Over Similar Name

A small Inglewood HMO has sued a giant competitor with a nearly identical name, complaining that its customers are getting confused and that its recruitment efforts will suffer as a result.

United Health Plan, an 80,000-member HMO operated by the nonprofit Watts Health Foundation, filed a trade name infringement lawsuit Thursday against United Healthcare Corp., a Minnesota-based firm with 14 million members in all 50 states.

United Health Plan is one of Southern California’s best-established HMOs, known for providing medical care to low-income and underserved people. United Healthcare is the nation’s second-largest for-profit managed-care company.

“We’ve worked 17 years to make United Health Plan be a name here in Southern California,� said Dr. Clyde Oden, founder and chief executive of United Health. “Whether one’s name ends in ‘Plan’ or ‘Care’ would just confuse many consumers about which company is speaking.

“I just sort of feel like David going up against Goliath,� he added.

United Healthcare wasn’t a significant player in California until its acquisition in October of MetraHealth Cos., which operates managed-care plans throughout the state. MetraHealth has now been renamed United Healthcare, which has launched a highly visible advertising campaign to introduce its name here.

United Health Plan, which has operated an HMO for low-income people since 1980, wasn’t happy when callers began inquiring about the United Healthcare TV ads they’d seen. Because the new company doesn’t participate in California’s Medi-Cal plan, the Inglewood firm says it could lose potential members.

“The problem is, people will see [United Healthcare’s] ads and think that’s United Health Plan,� said Floyd A. Mandell, a Chicago lawyer representing the Inglewood firm. “They might be told that United Healthcare doesn’t take Medi-Cal, and the consumers will never know the difference.�

Henry Loubet, a senior vice president in charge of United Healthcare’s Pacific region, said the company is aware of United Health Plan’s concerns and had hoped to resolve the issue “outside the legal process.� He said he had not yet seen the lawsuit Friday, and declined comment on it.

The civil suit, filed in federal court in Los Angeles, also alleges unfair competition and seeks to bar United Healthcare from using “confusingly similar� trade names in advertising and other promotions in the Los Angeles area.

Although its membership is relatively small, United Health was one of the first California health plans specifically geared to provide medical services to Medi-Cal recipients. Most large HMOs ignored that population until recently, when the state accelerated its efforts to switch Medi-Cal enrollees into private managed-care plans.

United Healthcare is the nation’s second-largest publicly held managed-care company, with 1995 revenue of $5.7 billion. It has 3.9 million members in HMOs and an additional 10 million in other types of managed-care plans.