UnitedHealth Group (NYSE: UNH) has agreed to buy LHC Group (Nasdaq: LHCG). The deal is reportedly worth about $5.4 billion.
The plan is to pair LHC Group – one of the largest home health providers in the U.S. – with Optum Health, which is already integrated into UnitedHealth’s network.
“Since our founding in 1994, ‘It’s all about helping people’ has been the core of our mission, and as part of the Optum team and its value-based capabilities, we will be able to expand our patient-centered mission and help drive best care practices across the country,” Keith Myers, LHC Group’s chairman and CEO, said in a press release. “Working together as organizations committed to caring for the most vulnerable in society will help us more effectively and efficiently deliver high quality and increasingly value-based care in the home.”
LHC Group declined to respond to Home Health Care News’ request for comment on the news.
The deal is one of the largest of its kind over the last five years in home-based care.
UnitedHealth is one of the biggest payers in the U.S., while LHC Group is one of the three largest home health providers, based on Medicare fee-for-service claims data.
The Lafayette, Louisiana-based LHC Group provides home health, hospice and home- and community-based services, as well as facility-based care. It has 964 locations across 37 states and the District of Columbia.
The company brought in about $2.22 billion in revenue in 2021, an over 7% increase from the $2.06 billion it brought in the year prior.
Meanwhile, Optum is a population health care provider. The company also acquired Landmark Health – an in-home medical care provider – for over $3 billion last year.
The deal further solidifies the idea that payers are increasingly becoming providers. Humana Inc. (NYSE: HUM) was formerly the greatest example of the trend, as it fully acquired Kindred at Home for a value over $8 billion last year.
“LHC Group’s sophisticated care coordination capabilities and its warm, human touch is so important for home care, and will greatly enhance the reach of Optum’s value-based capabilities along the full continuum of care, including primary care, home and community care, virtual care, behavioral health and ambulatory surgery,” Optum Health CEO Dr. Wyatt Decker said in a press release. “We greatly admire how the people of LHC Group have created a culture that enables them to be a trusted health care partner to patients and their families when they need it the most, and we look forward to working with and learning from them.”
The companies expect the transaction to close during the second half of the year. The agreement calls for the acquisition of LHC Group’s outstanding common stock for $170 per share.