The start-up insurer Harken Health has changed CEOs while accumulating red ink in the troubled market for individual coverage.

Harken Health is a pilot project from health insurance giant UnitedHealthcare that combines coverage with easy access to primary care at company-owned clinics in Chicago and Atlanta.

A regulatory filing by the company in August showed an operating loss of $69.9 million through the first six months of 2016 and a “cash infusion” of $60 million from its parent company at the end of June.

In a statement to the Star Tribune on Friday, Harken Health said that founding chief executive Tom Vanderheyden “has transitioned out of his role.” The subsidiary now will be led by Stevan Garcia, an executive with more than 25 years of health care leadership experience.

“With business progression often comes change,” Harken Health said in the statement.

In a separate statement to the Star Tribune last month, a Harken official suggested other changes could be in the works as the insurer looks at “opportunities we have to evolve our offerings.”

Harken Health is an independent subsidiary of UnitedHealthcare that’s focused on the individual market, where self-employed people and those who don’t get coverage from an employer buy policies.

The market includes new health insurance exchanges that were launched for 2014 under the federal Affordable Care Act but have been the source of financial losses for several insurers.

Harken also sells in the “off-exchange” market where customers buy individual policies directly from carriers or through brokers. The carrier sells to a few employer groups, as well.

Overall, Harken was providing insurance to more than 34,000 people at the end of the second quarter.

Harken Health subscribers can get primary care with no copays so long as they visit one of Harken Health’s clinics, which the company calls “health centers.” Beyond primary care, the centers also offer everything from sessions with “health coaches” to free classes in nutrition, tai chi and yoga.

The subsidiary’s emergence for 2016 on the exchanges in Chicago and Atlanta has made for an intriguing juxtaposition with UnitedHealthcare, which is retreating next year from the exchange markets in Georgia, Illinois and 28 other states following financial losses.

In May, Harken Health announced it would expand to the South Florida market but abandoned those plans in August.

Minnetonka-based UnitedHealthcare is the nation’s largest health insurer. Its parent company, UnitedHealth Group, provided about $65 million in capital to create Harken Health.

Financial losses aren’t uncommon for start-ups, said Stephen Parente, a University of Minnesota researcher focused on health economics and insurance.

In August, Bloomberg News reported that start-up carrier Oscar Insurance was re-evaluating its approach after suffering losses and deciding to drop two markets.

“As a start-up, they’re doing something that’s actually pretty challenging, which is they have to build a provider community, they have to put buildings in place and they have to establish a brand while all being part of a major corporation in terms of structure,” Parente said of Harken Health. “All that’s hard.”


Twitter: @chrissnowbeck