Humana Enters Home Health Market With $800M Provider Purchase
Humana has entered into the home health market with a $800M minority stake in the nation’s largest home health provider.
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By - Humana signed a definitive agreement to acquire a 40 percent minority in the Kindred at Home division of Kindred Healthcare, the nation’s largest home health care provider. The $800 million agreement follows several major announcements from payers looking to develop more integration across the care continuum.
The deal will complement Humana at Home’s existing care coordination services with Kindred at Home’s providers and home health care expertise. The remaining 60 percent will be owned by a new entity formed between investor groups TPG Capital and Welsh, Carson, Anderson & Stowe.
Humana said the minority ownership is a way for them to bring an integrated care model into a low-cost healthcare setting preferred by older beneficiaries, including Medicare Advantage (MA) members. The transaction extends Humana’s geographic coverage of their MA members and overlaps with 65 percent of Humana’s individual MA population.
“The acquisition of a minority interest in Kindred at Home, the largest home health company in the country with significant overlap with Humana membership, brings to us an experienced, well-respected home health provider with robust access to extensive clinical capabilities that will allow us to accelerate our strategy to more deeply integrate with our members’ lifestyles,” said Bruce D. Broussard, Humana’s President and Chief Executive Officer.
“We are excited about the opportunity this acquisition provides to advance our vision for integrated care delivery, as we continue to deliver our Humana At Home capabilities while building a transformative platform for the future,” Broussard added.
“We believe that care in the home is a vital element of improving the health of seniors living with chronic conditions, allowing them to receive services in the comfort of their home, with less time in more costly institutional settings.”
Humana and Kindred at Home will also participate in advanced data sharing to better inform clinical decision-making and strengthen a collaborative payment model between the two organizations.
“The combination of Humana At Home’s pursuit of improving care for seniors living with chronic conditions, in concert with Kindred At Home’s care delivery, will allow these important capabilities to create more effective care in a compassionate way for our members,” said William Fleming, Humana’s president of healthcare services.
“We look forward to transforming post-acute care through a value-based approach that will deliver improved clinical outcomes, ultimately lowering medical costs. We believe this work will lead to reduced hospitalizations, reduced emergency room visits, and allow physicians and clinicians to extend their care all the way to the patient’s home.”
Both Humana and Kindred at Home believe the transactions will close in the summer of 2018 following state and federal regulatory approvals.
The Humana deal is just one of many high-value healthcare mergers that expects to close by mid-2018.
CVS Health plans to purchase Aetna for $69 billion, which would combine one of the nation’s largest payer organizations with the largest pharmacy benefit manager in the US. Leaders at CVS and Aetna agreed that the merger would position both organizations as the national leader in providing affordable integrated pharmacy and medical benefits to consumers.
Optum of UnitedHealthCare announced a $4.9 billion purchase of DaVita Medical Group as a way to provide integrated ambulatory services to an expected population of 1.7 million patients.
The recent high-value mergers could sharply increase payer influence in the healthcare industry if these mergers receive approval from state and federal courts.
