Agencies Eye PacifiCare Health

Eager to shed its image as an HMO and win back the confidence of Wall Street, PacifiCare Health Systems is looking for an agency to handle a $15-20 million account that will recast the company’s identity and consolidate its ad efforts.

The 25-year-old firm, based in Santa Ana, Calif., has retained search consultant Select Resources International in West Hollywood, Calif., to find a full-service agency. The client expects to iden tify finalists early next month and name a winner in mid-December.

According to Jim Frey, PacifiCare’s senior vice president for branding and strategic initiatives, the goal is to establish the company as a broad-based supplier of health services. While PacifiCare, which had about $12 billion in sales last year, has a health-maintenance organization component, the campaign will stress other areas.

“We want to find an agency to help refocus the brand and show we are involved in areas outside insurance,” said Frey. He noted, for example, the firm’s clinical drug trials and sale of over-the-counter medications.

The agency search comes at a time when investors have been cool to HMOs and other health-insurance providers. This year, PacifiCare’s stock has fallen from more than $40 a share in February to less than $14 a share last week.

Ad chores have been parceled out to at least 15 agencies this year, with the largest piece handled by L.A.’s DavisElen. The shop has focused on PacifiCare’s Secure Horizons arm, which accounted for almost all of the parent company’s $10 million in media spending last year, per CMR.

DavisElen president Bob Elen said the shop will pitch the account, hoping to build on a relationship that began in July 1998.

“We don’t see this as cause for concern,” said Elen. “We see this as an opportunity to build on a strong relationship.”

Frey said the client was open to any shop that does not already have a healthcare provider or HMO on its roster. He added that he would like to hire an agency close to home.

“We have no preconceived notion of where the agency will be based or if it will be a single agency,” he said. “But, all things being equal, we would love to work with a West Coast agency.”