Optum, a UnitedHealth Group Subsidiary, Completes $4.3 Billion Acquisition of DaVita Medical Group

Recently, VCBeat (WeChat ID: vcbeat) learned from foreign media reports that the U.S. Federal Trade Commission (FTC) has approved Optum, a subsidiary of UnitedHealth Group, to acquire DaVita Medical Group for $4.3 billion, on the condition that UnitedHealth divests one of the medical groups it recently acquired in Nevada.

The acquisition was first announced on December 5, 2017, with both parties agreeing that Optum, a health services enterprise, would acquire DaVita Medical Group for approximately $4.9 billion in cash, and agreed to expand UnitedHealth’s clinics, urgent care centers, and outpatient facilities. DaVita Medical Group is one of the leading independent medical groups in the United States and a subsidiary of DaVita, Inc. At the time the agreement was signed, DaVita Medical Group managed 280 medical clinics across six states, employed more than 750 primary care physicians, and had contracts with 3,500 affiliated physician groups. The FTC spent a year and a half reviewing the transaction.

The FTC’s review found that UnitedHealth’s subsidiary, Optum, already operates one of the largest medical groups in Las Vegas, and the acquisition would harm competition among medical groups in the Las Vegas market. The FTC proposed a settlement agreement: allowing the acquisition to proceed, but requiring UnitedHealth to divest DaVita Medical Group’s Las Vegas operations to Salt Lake City-based Intermountain Healthcare within 40 days of closing the deal.

It is reported that DaVita Medical Group treats approximately 1.7 million patients annually across California, Colorado, Florida, Nevada, New Mexico, and Washington. Under the agreement, UnitedHealth will merge DaVita Medical Group with Optum, with Optum absorbing DaVita Medical Group’s operations, including primary care, specialty medicine, urgent care, and surgical services. This means that UnitedHealth will add approximately 225 clinics to its healthcare network footprint in California, Colorado, Florida, New Mexico, and Washington.

Currently, DaVita Medical Group’s operations in California, Colorado, Florida, New Mexico, and Washington have become part of OptumCare. Optum stated that the acquisition will improve care quality, enhance patient experience, and reduce care costs, serving more than 80 health plans.

“We are delighted to take this step toward building a next-generation, fully integrated and coordinated healthcare organization. Together, we will improve patients’ health and experience while reducing costs across the entire care continuum, including primary care, specialty care, urgent care, and surgical care,” said Andrew Witty, CEO of Optum.

DaVita, Inc. Executive Chairman Kent Thiry said, “Joining Optum, DaVita Medical Group opens a new chapter as we further advance patient care.”

Javier Rodriguez, CEO of DaVita, Inc., stated, “DaVita will remain committed to improving patients’ quality of life and expanding comprehensive care in the field of kidney care.” Under the agreement, DaVita, Inc. will continue to operate its U.S. and international kidney care businesses.

DaVita is a Fortune 500 healthcare provider dedicated to improving medical services to enhance the quality of life for patients worldwide. As the largest kidney care services provider in the United States, the company has been a leader in clinical quality and innovation for two decades. Through DaVita Kidney Care, it treats patients with chronic kidney failure and end-stage renal disease (ESRD). DaVita is committed to promoting a patient-centered care model, implementing the latest technologies to deliver comprehensive care services. As of March 31, 2019, DaVita served approximately 200,000 patients across more than 2,000 outpatient dialysis centers in the United States. The company also operates 234 outpatient dialysis centers in nine countries globally. DaVita strives to advance the kidney care industry by adopting equitable and high-quality care standards for all patients.

Optum is a health services company powered by information technology, dedicated to helping health systems better serve everyone. Optum has more than 160,000 employees worldwide. Optum provides intelligent, integrated solutions that help modernize health systems to improve the health of entire populations. Optum is a subsidiary of UnitedHealth Group.

UnitedHealth Group (NYSE: UNH) is a diversified health and well-being company dedicated to helping people live healthier lives and making the healthcare system work better for everyone. UnitedHealth Group offers a broad range of products and services through two distinct platforms: UnitedHealthcare provides health insurance and benefits services, while Optum delivers technology-enabled health services.

(Compiled by Zhang Jing)