UnitedHealth Group, LHC put off completion of merger
The announcement comes after the FTC in June issued a second request for information on the deal.
Photo: VioletaStoimenova/Getty Images
Under the watchful eye of the Federal Trade Commission, UnitedHealth Group and LHC Group have extended their merger agreement to March 28, 2023, with the deal expected to close sometime during the first quarter, according to a filing with the Securities and Exchange Commission.
At that time, UHG subsidiary Optum will combine with the in-home healthcare service provider, in a deal valued at $5.4 billion.
LHC provides healthcare services in the home for a demographic of mostly older patients dealing with chronic illnesses and injuries. It will be melded with Optum, which manages drug benefits and offers data analytics services and works with more than 100 health plans.
The announcement comes after the FTC in June issued a second request for information on the deal, with LHC saying the companies are in compliance.
WHAT'S THE IMPACT?
Optum positioned the move as helping to advance value-based care and said it would accelerate the combined companies' ability to deliver integrated care, leading to improved outcomes.
LHC Group's 30,000 employees, including frontline care providers and administrative and support personnel, provide more than 12 million annual in-home patient-focused interventions, according to the announcement.
The organization's quality scores run about one-third higher than the industry average, the companies said. The LHC Group leadership team will continue forward as part of Optum Health.
THE LARGER TREND
Hospital-at-home services have risen during the pandemic.
There are many hospital-at-home services, from urgent care, to skilled nursing, to home infusion services. But acute care at home has received the lion's share of attention from health systems, according to Mark Larson, principal of Sg2, a consulting and analytics firm and Vizient subsidiary.
Hospital at home became a concept that found itself in the right place at the right time, he said. Hospitals saw the hospital-at-home model worked so well, both for the patient and for the economic benefits, that the model is being pursued beyond the pandemic.
There is a financial advantage – Larson estimates a $3,000 contribution margin – if hospitals can backfill a lower-acuity patient from the hospital to the home, for a patient with a higher acuity-level and higher margin. Another advantage is providing an alternative avenue for hospitals to participate in value-based arrangements, especially with Medicare Advantage payers.
The Optum and LHC merger is focused more on services at home for those who are chronically ill or injured.
During the HIMSS22 annual conference in Orlando, Philips gave its top predictions for the future of healthcare systems over the next three years based on labor market trends and the expansion of hospital-at-home services. Among those predictions: Over the next three years, 40% of providers will shift 20% of hospital beds to the home.
Twitter: @JELagasse
Email the writer: Jeff.Lagasse@himssmedia.com
