Health care combination
UnitedHealth to buy DaVita Medical Group in $5B deal
The nation’s biggest health insurer is spending nearly $5 billion to buy hundreds of clinics, just three days after rival Aetna announced a tie up with CVS Health Corp.
Minnetonka, Minn.-based UnitedHealth Group Inc. said Wednesday that its Optum segment will buy the DaVita Medical Group from DaVita Inc. in a cash deal expected to close next year.
DaVita Medical Group in New Mexico has 17 locations in the Albuquerque metro area and 900 employees. The New Mexico group was formerly known as ABQ Health Partners.
Health insurers have been pushing deeper into managing or providing patient care in order to cut costs and improve health, especially for people with chronic conditions.
DaVita Medical Group runs nearly 300 primary and specialty care clinics in several states. It also has about three dozen urgent care centers and six outpatient surgery centers. It serves about 1.7 million people annually in California, Colorado, New Mexico and other states.
Optum already operates more than 1,100 primary, urgent care and surgery centers through a business it has been expanding.
On Sunday, CVS said it would pay about $69 billion for Aetna Inc., the nation’s third-largest health insurer. That deal could position the company as a one-stop-shop for basic health care, chronic disease monitoring, prescriptions and insurance to cover those goods and services.
Leaders of both companies are pitching that deal as a way to complement doctor care. They note that the company’s vast network of stores and clinics can help patients stick with treatment plans, monitor their conditions and do other things to improve their health.
Companies hope this more involved approach will keep patients on a treatment plan or living healthier lives, which could ward off expensive hospital stays.
Insurers also want their patients to use clinics and care centers as a way to cut down on the overuse of expensive emergency rooms for care that isn’t dire.
Denver-based parent DaVita Inc. said it will use proceeds from the deal to buy back stock and pare down debt. It plans to focus on its U.S. and international kidney care business.