UnitedHealth Group’s Optum is making another significant push into care delivery after its recent $5.4 billion merger agreement with home care company LHC Group. The question now is: What’s next for Optum?
The LHC Group merger, if approved by regulators, would give UnitedHealth a huge footprint in home care. To date, Humana has been the only other payer to make a significant investment in this sector. LHC, which operates 964 locations in 37 states and has 32,000 employees, says it reaches 60% of the U.S. population 65 and older with home health, hospice and home- and community-based services.
The move would complement Optum Health’s existing primary care and ambulatory surgery center operations.
But the LHC deal is just the latest in a series of huge investments UnitedHealth and Optum have made to continue their expansion into care delivery. Late last month Optum acquired Refresh Mental Health from private equity firm Kelso & Company, roughly 15 months after the private equity firm bought the behavioral health network for more than $700 million. Refresh has since been valued at $1.2 billion, according to an Axios report.
Meanwhile, Optum is preparing to defend its $13 billion deal for the health technology company Change Healthcare at an August trial after a legal challenge from the Justice Department over the deal. Optum announced the planned acquisition in January 2021. Critics of the merger, including the AHA, have warned that the deal could lead to massive consolidation in health care data. The AHA in a letter to the DOJ raised concerns that Optum and Change Healthcare’s plan to divest assets that generate hundreds of millions of dollars in revenue as a way to gain DOJ approval doesn’t go far enough to resolve substantial competitive challenges.