Published: Wed, December 06, 2017
Finance | By Loren Pratt

DaVita is selling underperforming managed-care unit for $4.9 billion

DaVita is selling underperforming managed-care unit for $4.9 billion

"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.

UnitedHealth's deal for one of the nation's biggest doctor groups, coming the same week as pharmacy giant CVS Health Corp. sealed its $69 billion deal to buy insurer Aetna Inc., underscores how health-care companies are forging deeper into segments outside their traditional core businesses.

UnitedHealth hopes to pair DaVita Medical Group's 300 medical clinics, 35 urgent-care centers, and six outpatient surgery centers-which reach around 1.7 million patients a year-with Optum's massive insurance division. It operates in states including California, Washington and Florida.

"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".

The acquisition of DaVita Medical Group, which includes such high profile organizations as HealthCare Partners and the Everett Clinic, is the latest move by UnitedHealth to expand into the realm of delivering medical care as a way of reducing costs. In March, UnitedHealth purchased Surgical Care Affiliates for $2.3 billion. Optum is not acquiring the kidney-care portion of the DaVita business. DaVita later expanded it.

DaVita says it plans to focus on its kidney-dialysis business, and use the money for share repurchases, debt payment and general corporate purposes. Its shares are up 36.48% this year, while DaVita is higher by just 0.74%.

The transaction is expected to close in 2018 and is subject to regulatory approval and other customary closing conditions.

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