US Health insurance company Humana has now purchased healthcare provider Kindred Healthcare for $4bn, according to reports, with private equity firms Anderson & Stowe, Welsh, Carson and TPG also involved in the deal.
The acquisition follows on from the recent $69bn deal for CVS Health to purchase Aetna, which has paved the way for consumer healthcare companies and insurance providers to come together and become a complete, healthcare based one-stop shop for consumers.
The news will come as a surprise to many, as Humana recently was in talks to partner with Aetna, prior to the CVS Health merger. In order to cement their position in the market, it has therefore been imperative for Humana and Kindred Healthcare to look at ways in which to remain competitive in what is becoming an increasingly volatile market space.
Although it has become one of the US largest nursing providers, Kindred has also been accumulating significant debts following on from its acquisition of Gentiva Health Services for just under $2bn.
However, the acquisition will see private investors take control of Kindred’s hospital and rehabilitation facilities, focus on the delivery of exceptional patient care whilst looking for increased opportunities to further Humana’s current population health capabilities and drive down costs.
“Interwoven with our provider strategy, we continue to be very focused on the home, as home is often a superior clinical environment to deliver care and reduce high-cost hospital admissions,” Humana CEO Bruce Broussard stated to Forbes.
“In its current state, care in the home is often disconnected from primary care physicians, challenged with issues on timeliness of care, lacking in robust data exchange, as well as based on a Fee-for-Service-driven business model,” which is soon set to change with this acquisition.