Company that will pay $ 4.9 billion to buy the group of doctors from the kidney care company DaVita
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the edition American print edition of The Wall Street Journal (December 7, 2017).
UnitedHealth Group Inc. will purchase DaVita Inc.'s group of physicians for approximately $ 4.9 billion in cash, in the latest sign of how the father of the largest US insurer will be. UU You are rapidly expanding your role as a health care provider.
The UnitedHealth agreement for one of the largest medical groups in the country, the same week that pharmaceutical giant CVS Health Corp. sealed its $ 69 billion deal to buy insurer Aetna Inc., highlights how Health service companies are forging segments beyond their traditional businesses. The combination of CVS would merge pharmacies, a pharmacy benefit manager, and insurance to build an integrated health care company without a physician base. That agreement is in contrast to the combination of UnitedHealth, which involves a PBM in addition to health coverage and, now increasingly, doctors.
The kidney care provider DaVita had previously said that it was "looking for strategic alternatives" for its medical operation, which has had unequal financial results and recently surprised investors by reducing the profits for DaVita, which recorded a net loss in the third trimester .
The UnitedHealth Optum health services arm has been building its list of medical offices, clinics and surgery centers with years of almost clandestine acquisitions, but the DaVita group represents its highest profile agreement so far in the business doctor.
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Larry C. Renfro, CEO of Optum, said the acquisition "advances our shared goal of helping physicians deliver exceptional patient care in innovative and efficient ways. "
DaVita Medical Group includes around 280 clinics that offer primary and specialized care, as well as 35 urgent care centers and six outpatient surgery centers. It operates in states that include California, Washington and Florida. The group employs around 2,200 healthcare providers, including doctors, nurse practitioners and medical badistants.
Earlier this year, Optum closed its $ 2.3 billion acquisition of Surgical Care Affiliates Inc., a major surgical company. Optum also took over last month from the health unit of Advisory Board Co., which advises hospital systems.
UnitedHealth has said that Optum aims to provide primary care and outpatient services in 75 markets, which represent approximately two-thirds of the US population. UU Last month, the company told investors that it had medical groups in 30 markets and a presence of health service providers in 60.
DaVita bought the large medical group HealthCare Partners LLC in 2012 in a $ 4.42 deal. billion that diversified it away from its core kidney care business. At that time, HealthCare Partners was the largest operator in the US. UU Of groups and networks of doctors. DaVita then expanded it.
But the company has had problems with the doctor's operation. DaVita attributed the result of the third quarter of the unit to higher than anticipated medical costs and other factors. At the same time, DaVita has been under pressure in its core business due to the scrutiny over the relationship of this and other renal care providers to a charity, the American Kidney Fund, which has helped patients pay for health coverage.
DaVita said it would use the proceeds of the agreement with Optum to repurchase shares, pay off debt and other purposes. The companies said the agreement was expected to close in 2018.
Warren Buffett's Berkshire Hathaway Inc. is the main shareholder of the parent company and owned approximately one-fifth of DaVita's shares through September 30. Berkshire portfolio manager Ted Weschler started the position after joining Berkshire in 2011.
Writing to Anna Wilde Mathews at [email protected]
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07 December 2017, 02:47 ET (07:47 GMT)