Analysts Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, but may initiate a beneficial Long position through a purchase of the stock, or the purchase of call options or similar derivatives in LHCG over the next 72 hours. If you have an ad-blocker enabled you may be blocked from proceeding. If you need individual or family medical and hospital coverage then you'll need to go with UnitedHealthcare as Humana no longer offer these types of plans, only through employers. Here are some of the biggest healthcare mergers and acquisitions of 2021: Primary care platform One Medical acquired Iora Health, a company that which works with insurers and employers to create private practices that are catered to specific communities, specifically Medicare patients who are over 65 years old. While some corporations are finding smart and creative ways to invest in the future, its essential that other industries do the same. If shed been able to affordably upgrade her living space with modifications that allowed her to remain safely in her home, her health physical, mental, and social health would have been buoyed, allowing her to age in place at a much lower cost to her health insurance company. UnitedHealth Group and Change Healthcare have amended the timing of their $13 billion merger agreement, according to Change's November 3 earnings statement. The merged entity would . These two concerns could be at play in the LHCG-UNH transaction. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. McMahon said partnerships are key to making these efforts succeed. Health Care Manage Rev. Most providers seeking to outsource patient financing, Kaiser Foundation Hospitals' new nonprofit Risant Health is acquiring Geisinger Health, HCA expects to invest $4.6B for land for new hospital development, Feds ask pharmacies to donate unused N95 masks, Bright Health explores sale of California MA business, Health benefit costs expected to rise 5.4% in 2023, Adverse events among inpatient admissions hit 25% in 2018, HIMSSCast: About 40-50% of hospital patient balances remain unpaid, 94% of physicians report care delays due to prior authorization, AMA says, Labor picture improving for hospitals, nursing homes, Real-time visualizations improved care at UVA, Medical devices are inherently vulnerable to security breaches, Physicians would rather leave than work for Envision, doctor says, Providence announces $712M expansion in southern California, Ex-Outcome execs convicted in $1B fraud scheme, Health policy post-Dobbs a 'confusing muddle', Sentara Healthcare moves into the community, CMS releases three initiatives to grow ACOs, Q&A: CMS' extension of Acute Hospital Care at Home indicates potential permanent program, Hospitals face direct competition from the 'retailization' of healthcare, CVS Health names Brian Kane president of Aetna, Practices keeping close watch on risk adjustment coding, CMS overhauls meaningful use as 'Promoting Interoperability', CMS proposes national standards for Medicaid and CHIP, Intermountain improved the patient experience through digital access, AHIP launches ad campaign calling out Big Pharma on drug prices, Healthcare professionals not speaking to patients about guns, UPMC for You offers Medicaid redetermination coverage in laundromats, Stanford finding success with inpatient telehealth, CVS and Signify's $8B deal expected to close this week, Payers must change dynamic with providers to survive in the post-Affordable Care Act world, CancerX innovation accelerator is the next phase of Moonshot, Senate strikes down healthcare worker vaccine mandate, CDC relaxes indoor mask guidance, including for schools, CA lawmakers introduce bill mandating workplace vaccinations, CVS files patent to sell healthcare services in the metaverse. While they likely have a long list of reasons, one in particular rises to the top: its good for business. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Yellow dot is where rumors appeared that FTCs request is focused on labor pay. Enhancing core operations: M&A deals, especially healthcare technology mergers and acquisitions, can help companies improve core operations and increase production while lowering operating costs. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. Humana bought the remaining 60 percent interest in Kindred at Home as a way tocontinue commitment to investing in home-based clinical solutions. UNHs labor pay history. UNHs other ongoing acquisition of CHNG. Paul Lendner ist ein praktizierender Experte im Bereich Gesundheit, Medizin und Fitness. We are pleased to complete the acquisition of Kindred at Home and fully integrate their home health services and clinical expertise into Humanas value-based home health business, Bruce D. Broussard, Humanas President and Chief Executive Officer, said in a statement. 1998 Jul;16(7):15-6. You may opt-out by. 8 - June 15, 1998 Issue Premier Executive John Biggers Discusses Reasons For Laboratory Initiative HMOs Planning Double Digit Premium Increases For 1999 Landmark Health provides in-home care, however, the focus is exclusively on the sickest and most complicated patients. MeSH and transmitted securely. It should be noted that the focus is also on post-acute healthcare services. The information provided here is not investment, tax or financial advice. As part of this investment, we not only provide seed financing for these services but also measure resident health and wellness outcomes over a three-year period to really understand the impact of this work, McMahon said. for people who live in these housing developments and the surrounding communities.. Here's LHCGs COO during the Q421 earnings call: And then shifting gears to retention, I'm pleased that we continue from all the data that we have access to, not only for the industry but across our peers, to be the leader in the industry when it comes to the voluntary turnover for our frontline staff. Humana, one of the largest publicly-traded managed care companies in the US, is to merge with United Healthcare in a $5.5 billion deal to create a $27 billion company operating across the entire US as well as Hong Kong, Singapore and South Africa. It never let up either, growing every quarter, according to data from Rock Health: in fact, Q3 2021, with 79 deals, was the largest quarter to date and August, which saw 33 deals, was the biggest digital health M&A month ever. Humana acquired home health and hospice provider Kindred At Home, Date: Announced April 27,closed August 17. Apparently, ever since the pandemic, UNH has sought to expand the segment. With this in mind, the merger is unlikely to result in UNH obtaining any alarming market power other than in several specific geographies where divestitures, if needed, could be reasonable to expect. Entering text into the input field will update the search result below. Apollo agreed to a partnership with the physician owners of GI Alliance to repurchase the minority stake in the company from Waud Capital Partners for $2.2 billion. Database management software company Oracle acquired Cerner, a supplier of health information technology services, devices, and hardware. MINNEAPOLIS (AP) _ Managed health care giants United HealthCare Corp. and Humana Inc. will merge in a $5.5 billion deal, the companies said today. LHC, which operates 964 locations in 37 states and has 32,000 employees, says it reaches 60% of the U.S. population 65 and older with home health, hospice and home- and community-based services. United HealthCare Corp. and Humana Inc. of Louisville, Ky., agreed to merge in a proposed tax-free stock swap valued at about $5.5 billion, both companies announced Thursday. I have no business relationship with any company whose stock is mentioned in this article. CHNG has agreed to divest its claims editing business but the DoJ has said any divestitures are not enough to consummate the transaction. By expanding our clinical team of physician medical directors, nurses, specialists, and benefits experts to include primary care doctors and mental health experts, we are responding to customers who are asking Accolade to expand our capacity to serve their employees at every step of their care journey. In July 2022, Amazon announced its intention to purchase One Medical in an effort to expand its primary care service options. Its critical, stated Thomas Hodapp, healthcare analyst at Robertson Stevens in San Francisco. OptumInsight provides data, analytics, research, consulting, technology and managed services solutions to hospitals, physicians, health plans, governments and life sciences companies. Nearly 70% of physical ailments have a mental health component, yet many primary care doctors dont know who to refer their patients to, Allon Bloch, co-founder and CEO of K Health, said in a statement. Until recently, the market was not pricing in any regulatory risk as the spread was around 2%. The move would complement Optum Health's existing primary care and ambulatory surgery center operations. Email the writer: [email protected], 2023 Healthcare Finance is a publication of HIMSS Media, Quantum computing poised to transform healthcare, AHA wants Congress to intervene in Medicare and Medicaid payments, Behavioral health access needs remote care and AI, Healthcare organizations ask HHS to delay quality measure reporting for ACOs. In a deal finalized in 2022, the private investment firm Clayton, Dubilier & Rice agreed to divest a majority interest in Humanas subsidiary company, Kindred at Home. The question now is: Whats next for Optum? Ken Fasola, CEO of Magellan Health, and other members of Magellan Health's leadership team, have agreed to join Centene. The Real Risks Of Underestimating Your Investment Time Horizon, Exxon And Chevron Notch Earnings Beats As Big Oil Continues To Fire, GDP Growth Slows In Q1, Adding Fuel To The Recession Fire, Three Things Companies Should Consider When Targeting Gen Z, 3 Reasons Small Businesses Turn To Alternative Financing, 15 Overlooked Financial Planning Topics Clients Forget To Ask About, How To Prepare For Mortgage Success During Uncertainty, Thematic Investing During A Transformative Year. I share insights on real estate, healthcare and wealth building. The new company would have annual revenues of about $27 billion and would operate in 48 states, Puerto Rico, Hong Kong, Singapore and South Africa with 50,000 employees. official website and that any information you provide is encrypted We see an immediate opportunity to build a new model of care delivery, one that delivers a connected experience with greater affordability, predictability and simplicity. The Dark Report 21806 Briarcliff Dr Spicewood, TX 78669Phone: 512-264-7103 Toll Free Number: 800-560-6363Email: [email protected]. The https:// ensures that you are connecting to the Together, with our aligned cultures, shared mission, and complementary models, we can drive even greater impact for our patients, our teams, and our investors, and most importantly, our shared vision of transforming healthcare., Prior to this acquisition, Iora Health had raised over $343 million in venture funding, most recently a$126 million roundin February of last year. Second, it believes it can extract economies of scale from its large size. As of 2019, the number of annual visits was at 400k. Sources: Company filings and HealthCare Appraisers. Companies without the legal strength to take on the government may struggle to obtain final approval for M&A deals. To assess this risk, I went through healthcare merger cases reviewed by FTC since Jan21. If these companies are not careful, a merger or acquisition could do more damage than good. Thats in addition to the $700 million theyve already invested in the past decade, creating a total of nearly 20,000 homes so far for low-income residents. in-the-pocket. Whats Next for Unitedhealth and Optum after $5.4 Billion Acquisition of Home Care Provider? Overall, FTC merger review history suggests that no merger has been denied solely due to labor/wage concerns. Even so, the companys presence in the post-acute in-home care market has been limited. But what of other industries? The best of both plans. The only remaining hurdle is antitrust approval. "The complementary combination brings together Humana's growing . Also, as of May, the FTC has shifted to a majority-democratic commission, possibly pointing to tighter regulatory scrutiny. UnitedHealth Group pays network providers directly but if you are billed by a provider, you can contact UnitedHealth Group at 1 (800) 328-5979. The merger still seems likely to close - both companies have a low overlap, the home healthcare market is highly fragmented and the Humana-Kindred merger is a closely comparable transaction. Mark Benjamin will remain CEO of Nuance, reporting to Scott Guthrie, executive vice president of Cloud & AI at Microsoft. Expertise from Forbes Councils members, operated under license. Upon closing,Neil de Crescenzo, President and CEO of Change Healthcare, will serve as OptumInsights chief executive officer, leading the combined organization. Inequities can be found in every facet of the industry, but targeting medical students and residents can help stem the tide. Bethesda, MD 20894, Web Policies What the merger does for United Healthcare is give it a strong presence in all 50 states, as well as Puerto Rico, Hong Kong, Singapore, and South Africa. The move is one of the largest instances yet of the consolidation taking place in the managed care industry. United HealthCare and Humana, two of the nation's largest for-profit managed care companies, have agreed to a $5.5 billion merger. Founded in 2011, combining the Houston-based 2nd.MD's solution with Accolades health and benefits solutions and clinical service offerings, is meant to simplify the healthcare experience for employees. While I, categorically, know nothing of any merger talks between two of the largest health insurers in the United States, our recent conversations with UnitedHealth Group We share a common vision to help every person live their healthiest life by dramatically improving quality and accessibility of care through a people-focused, clinically-driven support model. ---------------------------------------------------------------------------------------------------------, Accolade also acquired 2nd.MD, an Expert Medical Opinion and medical decision support company, Date: Announced January 14,closed March 4. ``The most successful health care companies in the next decade will be those whose products and services align with the needs and desires of consumers _ in other words, companies that offer people what they want, said Dr. William W. McGuire, United HealthCares chairman, president and chief executive officer. Laboratory executives will see several market trends validated in this mega-merger. On November 1, Change and UnitedHealth agreed not to consummate their merger before February 22, 2022, unless they receive written notice from the Department of Justice prior to the date that the DOJ has closed its investigation. AHA Center for Health Innovation Market Scan. Combined with an already massive insurance operation, the company will have more control over both insuring and providing healthcare to patients. Connect with the definitive source for global and local news. In my conversations with John Barger, national president of Medicaid programs at Humana, we talked about his companys real estate investments and their connection to better health for their customers. The resulting company will operate as United HealthCare in 48 states and Puerto Rico. And the National Academy of Medicine posted an insightful and in-depth view of social determinants in healthcare. Affordable housing means better health outcomes for UHGs customers a win in and of itself and better health means lower costs for the company, as well as other social benefits. Daily News Article Amazon sees massive growth potential in B2B ecommerce Article Headspace Health is expected to reach nearly 100 million lives across over 190 countries through direct-to-consumer business and over 2,700 enterprise and health plan partners around the globe. Andy McMahon, vice president of community engagement and investment at UnitedHealth Group (its Community & State division), emphasizes the connection between housing and health. (UHG) and Humana Accessibility The deal is expected to be completed in the first quarter of 2022 and is subject to regulatory approvals and customary closing conditions. Additionally, global issues, such as the ongoing labor shortage, supply chain disruptions, geopolitical turmoil and fluctuating inflation concerns, may spur an increase in the number of healthcare industry M&A transactions. All rights reserved. I was and still am surprised by the extent the markets are mis-pricing the risks/rewards in some situations - markets are very far from being efficient and your own research can give you a very sizable edge. The site is secure. All rights reserved. "Combining MDLIVE's platform and strong network for virtual providers with our comprehensive care solutions, we will be better positioned to optimize the care journey to improve affordability and accessibility, and to deliver superior support to health plans as they advance their own care delivery models for the future.". Admittedly, UNH is more vertically-integrated than Humana - in addition to health insurance, UNH offers significantly more healthcare services. Bob Segert, chairman & chief executive officerof athenahealth, will continue to lead the company along with the current management team. The other half will come from improving medical operations. This transaction confirms that consolidation proceeds in all areas of the healthcare industry, despite financial setbacks by large companies in several sectors. We continue to see in our own Medicaid data that when people have access to stable housing and supportive services, their health is managed more effectively. If youre interested in diving deeper into this subject, you can find a variety of reports and other resources. In June, however, the merger received a second information request from the FTC. For example, we noticed several primary factors prompting healthcare industry M&A activity, such as: Consolidating for inorganic growth: Many companies invest in M&A deals to advance inorganic growth by expanding their customer base, increasing their employee talent pool and building investor confidence. Most notable transactions included: Physician acquisitions (Kelsey-Seybold, Healthcare Associates of Texas, Atrius Health closed in 2022, tuck-in's) Refresh Mental Health: ~$1.2B. Assuming a somewhat conservative 6-month timespan, the setup would still provide a 10% annualized return. The reviewed guidelines are to be released before the end of 2022 which implies that there is a good amount of uncertainty here. Yellow dot is where. PlushCare had raised $31 million in venture funding prior to the acquisition. LHC, which operates 964 locations in 37 states and has 32,000 employees, says it reaches 60% of the U.S. population 65 and older with home health, hospice and home- and community-based services. We as investors and business leaders need to be having daily conversations about the intersection of health, wealth, and housing as we solve our societys problems. Plus, total agency number includes only Medicare-registered providers whose count stands at ~11k compared to a rough estimate of ~35k+ including non-licensed agencies. It is now expected to close in early 2022.Healthcare insurance company Centene acquired Magellan Health, a healthcare management organization that focuses on managing behavioral healthcare and diagnostic imaging. Humana, a Louisville, Ky . This new generation of medical information systems promises to lower the administrative workload burdening our medical professionals, improve patient privacy and outcomes, and lower overall healthcare costs.Mental wellness platform Headspace merged with Ginger, an on-demand mental health company providing access to emotional support via coaching, therapy and psychiatry, to formHeadspace Health, Date: Announced August 25,closed October 14. Whether the Walmart-Humana merger is really dead will not change the fact the healthcare industry is still in the midst . AET Beyond just a financial investment, we are now exploring how we can enable local services to tackle other challenges related to food, employment, health access, transportation, etc. Secondly, since Joe Bidens executive order on promoting competition in 2021, antitrust regulators have been putting increasing attention on healthcare mergers, highlighting impact on workers wages and the degree of vertical integration. Athenahealth partners with more than 140,000 ambulatory care providers, throughout all 50 states and across more than 120 specialties. The Center for Active Design offers a document called Healthcare: A Cure for Housing. Worst of all, the families in these neighborhoods often face health problems that limit their ability to live safely and independently in their old homes. We can learn a few noticeable trends from healthcare M&A activity during Q3 and Q4 2022. After a hot 2020 in healthcare mergers and acquisitions, 2021 came out of the gate swinging, with over 30 new deals being announced in just the first two months of the year. Aetna will pay $37 billion cash and stock to acquire Humana, the companies announced on July 3, in what will be the biggest health insurance merger to ever hit the industry. Addressing factors that impact peoples health, or what we call social determinants of health, is critical to improving not only personal health but the health of entire communities, McMahon explained. An official website of the United States government. Chris McKown and I founded Iora Health over 10 years ago to build an innovative primary care model that transforms lives and improves outcomes through relationship-based care, and we are excited to take this next exciting step with One Medical, Rushika Fernandopulle, co-founder and CEO of Iora Health, said in a statement. Second, the swords other edge is United Healthcares bargaining clout with hospitals, physicians, and other providers such as laboratories. Our work in this space is just getting started, Barger said. 6. For example, some healthcare companies may invest in acqui-hiring to help fight the labor shortage or acquire companies to overcome supply chain challenges. That's a lot of deals to integrate. Red dot represents FTCs second request date. As part of the transaction, KAHs home health operations will be integrated into Humanas Home Solutions business led by Susan Diamond. On the one hand, the industry saw a significant drop in M&A deals in 2022, as the number of these dropped from an average of 600 per quarter in 2021 to just 400 per quarter in 2022. Today marks a significant milestone for athenahealth and our partnership with Veritas Capital and Evergreen Coast Capital, and we are thrilled to work with Hellman & Friedman and Bain Capital to drive the next phase of our growth journey. Mit seinen Artikeln, die einen einzigartigen Expertenstatus nachweisen, liefert er unseren Lesern nicht nur Mehrwert, sondern auch Hilfestellung bei ihren Problemen. It will run 385 clinics across six states and provide health insurance to about one million people. Privacy Policy: We will never share your personal information. Why was the Aetna Humana merger blocked by the courts? Federal government websites often end in .gov or .mil. Refresh has since been valued at $1.2 billion, according to an Axios report. Private equity firms Bain Capital and Hellman & Friedman acquiredcloud-based electronic medical record provider Athenahealth. FTC argued that Illumina would be the only provider of DNA sequencing for cancer protection - hard to find parallels to UNH-LHCG deal. Firstly, UNHs other ongoing $13bn merger with Change Healthcare (CHNG) has received pushback from the DoJ. One reason is that both United Healthcare and Humana were aggressive at pushing up premium rates with their employer customers. The transaction is expected to close in 2022. I know firsthand that corporations cant do everything, but some of them are taking significant steps toward making a real, lasting difference in tens of thousands and soon, hopefully, millions of peoples lives., The leaders at UnitedHealth understand the inseparable link between income, housing, and health.