Optum party to $2.2B physician staffing firm acquisition
- UnitedHealth Group’s health services arm OptumHealth is part of a $2.2 billion deal to gain a controlling interest in medical staffing company Sound Inpatient Physician Holdings, the Star Tribune reported.
- The deal was originally tipped off in April when Fresenius Medical Care, a German dialysis company, announced plans to sell its stake in Washington state-based Sound Inpatient to a consortium.
- On Wednesday, Moody’s Investors Service released a debt rating report related to the transaction, revealing Optum and Summit Partners as the acquiring firms.
Advances in technology coupled with pressures to improve outcomes and reduce costs have led to a spate of vertical integrations.
According to a recent McKinsey report, vertical integrations accounted for up to half of all healthcare delivery activity in 2016 and 2017. That trend that is expected to continue. Recent deals like Optum’s planned acquisition of DaVita, CVS’s planned purchase of Aetna and Cigna’s bid for Express Scripts are reshaping market trends and creating opportunities for products that tackle a broader set of customers’ needs.
Optum has been a trendsetter in vertical integration and is likely to continue to that track as it looks to invest in AI, machine learning and natural language processing over the next few years.
UnitedHealth created the company by combining existing pharmacy and care delivery services in 2011, and set its sights on three industry trends: data analytics, value-based care and consumerism. Since then, Optum has been on a shopping spree to establish itself as a leader in integrated services. In addition to its $4.9 billion acquisition of DaVita, the company bought the Advisory Board Company for $2.58 billion, ambulatory surgery center chain Surgical Care Affiliates for $2.3 billion and Massachusetts-based Reliant Medical Group.
While Optum’s investment in Sound Inpatient should bolster its care delivery business, physician staffing companies have come under scrutiny because of concerns their use leads to surprise billings.
In December, EmCare settled with the Department of Justice for $33 million over allegations it recommended patients to Health Management Associates hospitals on an inpatient rather than outpatient basis in exchange for remuneration from HMA. Earlier last year, investors sued EmCare parent Envision Healthcare over EmCare’s alleged billing of emergency room patients for out-of-network charges.