LifePoint Health enters into agreement to acquire Kindred Healthcare
The companies cited several benefits, including complementary services and investments in tech and behavioral health.
Photo: Mikolette/Getty Images
LifePoint Health entered into an agreement to acquire specialty hospital company Kindred Healthcare this week, signaling the creation of a healthcare delivery network that allows LifePoint to tap into Kindred's specialty hospital and rehabilitative expertise, as well as its emerging behavioral health platform.
A sales price for the transaction was not disclosed, but the companies did reveal that LifePoint plans to invest roughly $1.5 billion over the next three years to advance healthcare delivery in the regions in which it operates.
The deal is expected to bring together LifePoint's national network of community-based hospitals, providers and access points with Kindred's expertise in delivering long-term acute care, rehabilitation services and behavioral health services. The combined company will have the goal of responding more quickly and comprehensively to patients' needs.
The two companies cited several benefits to joining forces, including an array of complementary services, standardized care at the bedside, opportunities to develop and expand behavioral health services, and investments in services and technology in new and existing markets.
LifePoint expects that the transaction will improve healthcare outcomes and access without increasing costs for patients. The idea, the companies said, is to focus more on investment in community healthcare, rather than cost savings that may result from the deal.
WHAT'S THE IMPACT?
This isn't the first such deal for LifePoint, since it has pursued joint ventures with academic medical centers, the development of the company's National Quality Program, service line partnerships, technology advancements, and investments focused on the provider experience.
Kindred, meanwhile, has formed joint ventures and partnerships over the last several years with multiple hospitals – a strategy that has allowed it to expand into new markets with a particular focus on value-based care. As a combined entity, LifePoint and Kindred will continue with this strategy, bolstering its market presence by partnering with health systems in areas where they don't already operate.
The $1.5 billion in investments planned by LifePoint include funds that will be directed toward the personal and professional growth of its employees, particularly nurses and frontline staff; capital projects to increase access points; and technology, digital solutions and equipment to increase local access to advanced services.
The transaction is expected to be completed in the fourth quarter of this year. More details about financing and organization structures will emerge in the intervening time. The acquisition is not being financed with any funds that have been received as a result of the Coronavirus Aid, Relief and Economic Security (CARES) Act or any related legislation.
THE LARGER TREND
The last time LifePoint pursued a merger or acquisition of this magnitude was in 2018, when it finalized a merger with RCCH HealthCare Partners. The combined privately held company operates under the LifePoint Health name and includes a footprint of regional health systems, physician practices, outpatient centers and post-acute facilities in more than 85 non-urban communities from coast to coast.
Earlier this year, Kindred's home health operations were integrated into Humana's Home Solutions business, taking on the same branding as Humana's new payer-agnostic health services arm, transitioning to CenterWell Home Health. Humana is now the sole owner of Kindred at Home.
Humana plans to use a combination of cash and debt financing to pay for the $5.7 billion transactions. The deal is subject to state and federal approvals, but is expected to close in the third quarter of this year.
ON THE RECORD
"Adding Kindred Healthcare to LifePoint is one of the most significant demonstrations, in our company's history, of LifePoint's commitment to our deeply rooted mission of Making Communities Healthier," said David Dill, president and CEO of LifePoint.
"Kindred's focus on healing and hope, provided through its long-term acute care hospitals, rehabilitation centers and most recently its behavioral health services – an important and growing need across the country – is highly complementary to the current LifePoint network.
"We are honored to welcome Kindred's talented group of employees and providers into the LifePoint family. We share a commitment to partnerships to benefit patients, and together, we will advance clinical and quality excellence, make healthcare more accessible and support healthier communities."
"This combination with LifePoint, one of the leading community healthcare companies in the United States, is a validation of Kindred's success," said Kindred CEO Benjamin A. Breier. "Over the last several years, we have transformed Kindred into the nation's leading specialty hospital company, known for improving outcomes and providing compassionate care for the most medically complex patients. LifePoint's investment in Kindred underscores the outstanding reputation our team has built upon a foundation of innovation, and clinical and operational expertise.
"Kindred and LifePoint have highly complementary capabilities and together we will be poised to further improve patient care across the healthcare continuum. The combination with LifePoint also creates enhanced career development and advancement opportunities for our Kindred teammates, who have been the driving force behind our mission of delivering hope and healing to the most medically complex patients. We are excited to move forward and realize the benefits of this combination for our patients and their families, our joint venture partners, and our team members."
Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com
