Burst Of Deals Reveals A Fast-Changing Health Industry Landscape
On Tuesday, health insurer Humana became the latest company to tout a new acquisition that will move the industry away from hospitals and toward clinics, doctors’ offices and surgery centers.
The Wall Street Journal:
Deals Boom In Push To Move Health Care Out Of Hospitals
A recent burst of deal-making among health-care companies is set to accelerate the shift in how and where Americans get medical care—away from hospitals and toward clinics, doctors’ offices, surgery centers and even drugstores. Potential mergers disclosed since early December involve companies with more than $550 billion in cumulative revenue, a sign of how much of the industry is caught up in efforts to reshape the landscape. (Wilde Mathews and Evans, 12/20)
Reuters:
Humana, Private Equity Firms Buy Kindred Healthcare For $810 Million
Humana, the fourth largest U.S. health insurer, will pay $800 million in cash for Kindred shares and to cover other costs. That will give it a 40 percent stake in Kindred at Home, which will employ the 40,000 Kindred caregivers who serve about 130,000 patients daily. It will not have a stake in the second Kindred unit. (Humer, 12/19)
Modern Healthcare:
Humana, Two Private Equity Firms Will Buy Kindred Healthcare For $4.1 Billion
In the latest in a string of deals pairing insurers with healthcare providers, health insurer Humana and two private equity companies will divide and buy long-term care and home healthcare provider Kindred Healthcare for $4.1 billion, the companies announced Tuesday. Humana, TPG Capital and Welsh, Carson, Anderson & Stowe will split Kindred into two companies, with TPG and Welsh taking over its long-term care hospitals and inpatient rehab facilities. The two private equity companies and Humana together will operate Kindred's home health, hospice and community care businesses as a stand-alone company. Humana will own 40% of that company, and the private equity firms will own the rest. (Livingston, 12/19)
Meanwhile, in other industry news —
The Wall Street Journal:
Tenet Healthcare Explores Sale Of Conifer, Expands Cost-Cutting Program
One of the nation’s largest for-profit hospital chains, Tenet Healthcare Corp., is exploring a sale of its health-care operations management business and plans to boost cost-cutting efforts. The moves announced Tuesday come after the company announced 1,300 job cuts in October. (Hufford, 12/19)
Modern Healthcare:
Tenet Mulls Sale Of Revenue-Cycle Management Subsidiary Conifer
In an announcement Tuesday morning, Tenet said it is expanding its cost-cutting strategy from $150 million to $250 million in expected savings realized by the end of 2018. It also enlisted Goldman Sachs to explore selling Conifer and is aligning executive compensation with patient quality and experience benchmarks. Conifer provides software to hospitals and doctors to help them register patients, authorize their insurance and bill them and payers for care. It serves Tenet's 77 hospitals and more than 700 other hospitals, including some that are managed by Catholic Health Initiatives, which owns a minority stake in Conifer. (Kacik and Barr, 12/19)
Dallas Morning News:
Tenet Looks To Sell Conifer, Its Frisco-Based Debt Collection Company
With $15 billion in long-term debt logged as of June 30, the company said Tuesday that it is continuing to take “aggressive actions” to improve its financial performance, accelerate growth and eliminate unnecessary costs. "We remain open to all options that can enhance shareholder value," said the interim chairman and chief executive, Ronald Rittenmeyer, who took over the organization in September. (Rice, 12/19)
The Philadelphia Inquirer:
Cooper Health Sues After Failed Hospital Acquisitions
Cooper University Health Care has gone to court to recover $15 million held in escrow after its abandoned attempt to acquire Lourdes Health System and St. Francis Medical Center. In late August, Cooper announced it had signed a letter of intent to acquire Lourdes and St. Francis from Trinity Health, a large Catholic health system based in Livonia, Mich. Once completed, Camden-based Cooper would have grown into the largest health system in South Jersey with nearly $2 billion in revenue yearly. (Moran, 12/19)
