A few yr in the past, UnitedHealth Group’s Optum introduced that it plans to amass residence care firm Amedisys for about $3.3 billion, beating out Possibility Care Well being. The deal could be an all-cash transaction for $101 per share. The announcement got here at a time when a number of healthcare firms had been making strikes within the residence care area, together with CVS Well being and Walgreens.
But it surely hasn’t been clean crusing for Minnetonka, Minnesota-based UnitedHealth Group and Baton Rouge, Louisiana-based Amedisys. The U.S. Division of Justice (DOJ) has been scrutinizing the deal, and the Oregon Well being Authority launched a overview to see if the deal would hurt individuals in Oregon. The DOJ has additionally reportedly launched an antitrust investigation into UnitedHealth Group (UHG).
In late June, nevertheless, Amedisys disclosed in a submitting with the Securities and Change Fee that Amedisys and UHG have entered into a purchase order settlement to promote sure Amedisys residence well being care facilities and sure UHG care facilities to VCG Luna, an affiliate of VitalCaring Group. The divestiture of the unknown variety of care facilities is contingent on the consummation of the merger between Amedisys and UHG, which is anticipated to shut within the second half of 2024, in keeping with the submitting.
Will this transfer assuage the DOJ and immediate it to approve the Amedisys/UHG merger? The company didn’t return a request for remark, and UHG declined to remark. However a number of specialists stated they consider the deal will doubtless undergo — doubtlessly with some small modifications.
“I believe they’re aiming to seek out the least quantity of land crucial to surrender with out exceeding greater than is important. If I used to be a betting individual, I’d guess that now the percentages are that the deal will both go forward as now scheduled, or possibly with small modifications,” stated Dr. Robert Pearl, former CEO of the Permanente Medical Group and present professor at Stanford College College of Medication and Stanford Graduate College of Enterprise, in addition to a healthcare creator and podcaster.
These modifications may embrace divesting further residence well being facilities, although in all probability not much more, Pearl added. For instance, Amedisys and UHG might divest 100 facilities initially (although the precise quantity is unknown). However the authorities might say that’s not sufficient and inform them to divest 20 extra, in keeping with Dr. Adam Brown, an emergency doctor and founding father of ABIG Well being. However the divestitures would doubtless nonetheless be within the residence well being area since that’s the place there may be crossover between UHG and Amedisys.
Pearl famous, nevertheless, that this divestiture to VitalCaring most probably occurred after a interval of negotiations, so “the entire items are in place until one thing sudden occurs — corresponding to a Congressional or Presidential intervention.”
One other knowledgeable agreed that there might be extra divestitures past this preliminary deal, but it surely’s “extra doubtless than not that [the merger] will undergo.”
“If there are different steps they should take, I believe that they’re going to work in the direction of these as a result of Optum appears fairly inclined to proceed with the deal and do what they need to do to make that occur,” stated Tyler Giesting, director of healthcare and life sciences at Chicago-based West Monroe. “So I’d say it’s extra doubtless than not, however you possibly can by no means make sure.”
One {industry} knowledgeable — Hal Andrews, president and CEO of Trilliant Well being — famous it’s “doubtless that UHG obtained a ‘head nod’ that the proposed divestitures could be enough.”
That stated, “prognosticating what occurs in Washington, D.C. proper now could be a bit like shaking the Magic 8-ball — particularly in an election yr,” he added.
Whereas a number of specialists say it’s possible the merger between Amedisys and UnitedHealth Group will undergo ultimately, Brown remains to be nervous in regards to the downstream results of the merger.
“I’m deeply involved in regards to the rising management UHG exerts over the U.S. healthcare system,” Brown stated in an electronic mail. “UHG already runs the biggest non-public well being insurer within the nation and manages a considerable doctor community. Their affect and market dominance make negotiating with them or competing in opposition to them extraordinarily difficult.
“The DOJ’s scrutiny of this explicit merger is important, however we must also think about the broader implications,” he continued. “UHG’s latest Change Healthcare hack highlighted industry-wide monetary and affected person care challenges. At what level will we acknowledge that UHG is turning into a ‘too massive to fail’ behemoth that we proceed to feed?”
Certainly, UHG has grown exponentially over time, having spent greater than $41.4 billion on 26 acquisitions because it was based in 1977, together with Change Healthcare (acquired in 2022), LHC Group (acquired in 2023) and DaVita Medical Group (acquired in 2019). It additionally employs or contracts with hundreds of physicians and owns OptumRx, one of many high three pharmacy profit managers. Its insurance coverage arm, UnitedHealthcare, controls 15.7% of the medical insurance market.
Pearl stated he’s unsure UHG is essentially a villain. Slightly, it’s your entire healthcare system as a complete that wants altering. He reiterated what he advised MedCity Information in an earlier interview.
“I believe UnitedHealth Group is the most important so it turns into the goal,” Pearl beforehand stated. “However it isn’t intrinsically — from what I find out about it — a extra problematic firm than another firm in healthcare. I believe it’s the damaged system that everybody is making an attempt to work round, plug holes and contain lots of middlemen.”
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