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Optum to Purchase DaVita Medical Group for $4.9B

Optum will purchase DaVita Medical Group for $4.9 billion, expanding the UnitedHealth subsidiary’s presence in the direct care delivery market.

Optum a UnitedHealth subsidiary will purchase DaVita Medical

Source: Thinkstock

By Thomas Beaton

- Optum, a subsidiary of UnitedHealth Group, has agreed to acquire DaVita Medical Group for $4.9 billion, expanding the health care services company’s footprint in the direct care delivery environment.

The acquisition, expected to be finalized in 2018, DaVita would add 300 primary and specialty care clinics that serve 1.7 million patients into the OptumCare division.  The deal also includes the purchase of 35 urgent care centers. OptumCare currently offers 80 health plans that serve millions of beneficiaries with a network of 30,000 physicians.

The payer believes that the merger of OptumCare and DaVita will create integrated ambulatory care delivery systems that improve costs and patient outcomes. DaVita’s chief operating officer, Joe Mello, will continue his leadership role in the combined group, as will other members of the DaVita leadership team.

Executives at Optum added that their ability to leverage analytics and health information technology will allow both organizations to deliver the best possible care.

“The physicians and clinicians of DaVita Medical Group provide outstanding patient care, and we look forward to supporting their continued success in serving their patients and communities,” said OptumHealth CEO Andrew Hayek.

“We also look forward to working closely with the leadership team of DaVita Medical Group to combine our capabilities and, supported by the data analytics and technology capabilities of Optum, enhancing patient care and the value we provide to the communities we serve.”

DaVita plans to use the funds from the deal to settle financial matters including stock repurchases from shareholders and paying off corporate debts. Ken Thiry, CEO of DaVita Medical Group,said that the new funds will also go towards further improvement of their population health capabilities.

Thiry added that the deal will ultimately improve DaVita’s ability to provide exceptional healthcare performance, going beyond DaVita’s history of providing high-quality healthcare.

“I am so proud of the DaVita Medical Group accomplishments, including our excellent clinical outcomes as reflected in our star ratings performance, our strong emphasis on growing physician leaders, our teammate engagement, and advancing the care model,” Thiry said. “The combination of DaVita Medical Group and Optum should lead to even higher levels of performance.

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