Dive Brief:
- Germany-based Fresenius Medical Care has agreed to acquire US-based Cogent Healthcare, which provides specialist physicians to hospitals. The move is part of its strategy for offering more services connected to its core kidney dialysis business.
- Buying Cogent, which should have $250 million in sales next year, is part of FMC's plans to develop a $5-billion care coordination business by 2020. This effort, in turn, is part of a larger initiative to nearly double group sales to $28 billion on the same timeline.
- While FMC didn't disclose what it was paying for Cogent, Reuters estimates that the sale price was probably around $375 million.
Dive Insight:
In broadening its care coordination and chronic disease management services, FMC is simply flowing with the tide. US health plans are moving toward a system under which they pay providers like Fresenius a lump sum for diabetic patient care rather than paying for individual drugs and services. To address these changes, FMC leaders believe they must broaden what they offer.
That's why the company was willing to pay not only for Cogent, but also lay out $600 million for a majority stake in Sound Inpatient Physicians.Like its American competitors, FMC will have to compete in a world in which they must control costs at the source by preventing complications and seeing to it that patients follow treatment plans. FMC clearly believes it can meet this standard if it has enough doctors in place. Let's see if that actually happens.