Bruce Japsen May 23, 2019, 01:00pm
UnitedHealth Group is still working with
regulators to close its acquisition of DaVita Medical Group, a $4 billion deal
that has dragged on much longer than investors and observers of the health
insurer have expected.
But there appears to be no cause for alarm from
the nation's largest health insurer even as the effort to finalize the deal
heads into its 19th month.
First announced in early December
of 2017, UnitedHealth’s $4.3 billion acquisition has closer scrutiny
from regulators than expected. It’s also unusual for UnitedHealth, an
acquisitive company that has built up its Optum health services business into a
giant with more than $100 billion in annual sales through organic growth and
other doctor practice and outpatient center acquisitions that have closed with
few glitches.
The DaVita Medical transaction was originally expected to close in
2018 but that changed after the acquisition price fell by about $600
million from $4.9 billion. And in a regulatory filing last
year, Davita said it expected to close the transaction “in the first quarter of
2019.” That deadline, too, was missed.Though UnitedHealth isn’t disclosing a
future date for the close, it appears to be no cause for alarm.
“We are working diligently with regulators to
complete our combination as soon as possible,” a UnitedHealth Group spokeswoman
said Thursday. “We look forward to working together to
deliver high-quality health care and a unique consumer experience while
reducing costs and enabling physicians to focus on what they do best: care
for their patients.”
Once it closes, UnitedHealth’s Optum will gain
a large network of nearly 300 medical clinics that treat more than 1.7 million
patients annually, the companies have said.
“It is a critical part of the strategy that we
have around reinventing health care delivery to access more markets and at the
same time then go much deeper into those markets to make them work much more
effectively,” UnitedHealth Group CEO David Wichmann told analysts on the
company’s first quarter earnings call last month. “At this stage, we
have a clear path to approval in closing of the transaction, but unfortunately,
we cannot comment on further details or timing at this stage. We are working
through a couple of matters that remain.”
The deal is part an escalating battle in the
healthcare industry to put providers of medical care under the same umbrella as
health insurance companies. Pharmacy giant CVS Health last year bought Aetna,
the nation’s third-largest health insurer, insurer Humana has been signing
deals with multiple providers including drugstore giant Walgreens Boots Alliance,
and big Blue Cross and Blue Shield plans including Anthem and Health Care
Service Corp. are investing in primary care providers.
DaVita Medical Group is a subsidiary of DaVita
Inc., which is a large provider of kidney care and dialysis services across the
U.S.
Less than a month ago, DaVita's board named a
new CEO in Javier Rodriguez who is succeeding Kent Thiry, who is retiring after two
decades, effective June 1. "Thiry will
transition from his current role as chairman and CEO to executive chairman of
DaVita's board of directors," DaVita said.
UnitedHealth is not acquiring the DaVita
kidney care centers. The DaVita operations sold to Optum include urgent
care centers, surgery centers and medical clinics with primary care
doctors and specialists in California, Colorado, Florida, Nevada, New Mexico and
Washington State.
The addition of the DaVita operations would
add to an already growing national network of medical care providers under the
Optum umbrella.
“OptumCare's vision for care is to create
leading value-based patient centric physician health care system in the United
States and we will do this through local markets,” Dr. Wyatt Decker, CEO of
OptumHealth told analysts in April on UnitedHealth’s first quarter earnings
call.
No comments:
Post a Comment