UnitedHealth to Buy In-Home Care Company for $5.4B
Minnetonka-based health insurance giant UnitedHealth Group is betting big on the future of in-home health care.
On Tuesday, the company said it has reached a deal to buy Louisiana-based in-home care provider LHC Group for $5.4 billion. UnitedHealth will fold LHC into its Optum Health subsidiary, the insurer’s primary care delivery arm. If approved by regulators, the deal will bring 30,000 LHC employees under the UnitedHealth umbrella. The transaction is expected to close in the second half of 2022.
“LHC Group’s sophisticated care coordination capabilities and its warm, human touch is so important for home care, and will greatly enhance the reach of Optum’s value-based capabilities along the full continuum of care, including primary care, home and community care, virtual care, behavioral health and ambulatory surgery,” said Optum Health CEO Dr. Wyatt Decker in a news release.
Though it’s based in Louisiana, LHC provides care services in 37 states and Washington, D.C. The company, which also provides hospice and community-based care, also says it works with more than 100 different health plans.
The deal is, of course, not a foregone conclusion. In early 2021, UnitedHealth announced plans to acquire Tennessee-based health tech company Change Healthcare for $13 billion only to be met by stiff opposition from the U.S. Department of Justice. The DOJ and attorney generals in Minnesota and New York have filed a suit saying that the deal would stifle competition. For its part, UnitedHealth Group has said it intends to “vigorously” defend the proposed transaction.
Meanwhile, if the LHC deal goes through, it will likely pay off handsomely for UnitedHealth Group. As baby boomers age, the market for in-home care is expected to expand substantially. The U.S. Bureau of Labor and Statistics has said that the job market for home health and personal care aides is slated to grow at a much faster clip than many other industries in the years ahead.
The deal would be a “nice strategic fit” for UnitedHealth, the Associated Press quoted an analyst as saying.