Billion-Dollar DaVita Deal Highlights Movement Toward Mergers, ACOs

This particular deal, in which DaVita will acquire HealthCare Partners, will enable the dialysis services provider to offer a more integrated group of services that fall under the ACO model that the government is trying to encourage. 

Los Angeles Times: HealthCare Partners to Be Bought By DaVita In $4.42 Billion Deal
HealthCare Partners, the Torrance owner of physician groups in Southern California, Nevada and Florida, agreed to be acquired in a $4.42-billion deal by dialysis chain DaVita Inc., as large healthcare companies continue snapping up doctor groups and clinics. … Nationally, much of the merger activity stems from Medicare, which is moving away from fee-for-service payments that encourage volume rather than quality care or efficiency. Instead, Medicare is adopting new payment methods that reward medical providers that keep patients healthy and curb excessive spending. If those so-called accountable-care organizations succeed at managing their pool of patients, Medicare allows them to share in the savings and boost their profits (5/22).

The Wall Street Journal: Dialysis Firm Bets On Branching Out
In striking the deal, DaVita is wagering that American health care is changing significantly—moving away from a fragmented world in which individual doctors and hospitals get fees for each service, and toward large integrated providers that coordinate all patients' medical needs and get paid in ways that reward quality and efficiency. HealthCare Partners gets much of its payment in so-called capitated flat fees that are supposed to cover nearly all of a patient's care, an arrangement that puts a provider at risk of losing money if the person requires many pricey services (Mathews and Athavaley, 5/21).

Reuters: DaVita Looks To New Healthcare Model With $4.42 Billion Deal
DaVita Inc, the biggest U.S. operator of dialysis clinics, sought to better align itself with government efforts to cut healthcare costs with a $4.42 billion deal to buy HealthCare Partners, an operator of physician practices. The deal will allow DaVita to offer a more integrated group of services that the government is looking to incentivize through its accountable care organizations (ACO) model (5/21).