UnitedHealth ventures deeper into patient care with $5B deal

UnitedHealth's Optum to acquire DaVita Medical Group, DaVita up 3% premarket

UnitedHealth to Buy DaVita's Physician Group For $4.9 Billion Cash

UnitedHealth's service and innovation arm Optum announced Wednesday it will acquire DaVita Medical Group for $4.9 billion.

The proposed deal comes on the heels of news of another big insurer, Aetna, and its plans to merge with CVS Health.

At a time of increasing uncertainty in the health care marketplace, insurers, hospitals, doctors and drugstores are looking outside their traditional businesses to join forces.

UnitedHealth's Optum health-services arm has been building up its roster of physician practices, clinics and surgery centers with years of mostly under-the-radar acquisitions, but DaVita's group represents its highest-profile deal so far in the doctor business.

"Following this transaction, DaVita will continue to be a leader in population health management, with a focus on our USA and global kidney care businesses", Kent Thiry, chairman and CEO of DaVita, said in the news release.

DaVita will continue to operate DaVita kidney care, which owns or helps manage 2,470 outpatient dialysis centers in the United States. The company already operates medical practices in Southern California and elsewhere, and it owns almost 250 MedExpress urgent-care clinics. Last month, the company told investors that it has medical groups in 30 markets, and a health-care provider presence in 60.

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The business made deals to buy the healthcare side of the Advisory Board Company for $2.58 billion, ambulatory surgery center chain Surgical Care Affiliates for $2.3 billion and Reliant Medical Group in MA. At the time, HealthCare Partners was the largest US operator of physician groups and networks.

The acquisition of DaVita would expand that reach considerably.

But the company has struggled with the physician operation.

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. DaVita paid $4.4 billion for the physician-network business in 2012, but has sold small chunks and acquired other businesses since.

DaVita plans to use the funds from the deal to settle financial matters including stock repurchases from shareholders and paying off corporate debts.

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