Illusion of choice

6 December 2017 By Robert Cyran Follow @rob_cyran

The U.S. healthcare system is full of intermediaries chasing after a share of the industry’s profit, often by gaming each other. UnitedHealth Group’s $4.9 bln purchase of a physicians group from DaVita is the latest example of trying to cut costs by eliminating links.

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UnitedHealth Group said on Dec. 6 it had agreed to buy DaVita's physician-network business for $4.9 billion. The insurer will acquire nearly 300 clinics that serve about 1.7 million patients, as well as 35 urgent-care centers and six surgery centers.

This is UnitedHealth’s second major purchase of the year after buying Surgical Care Affiliates for about $2.3 billion in March.

DaVita’s unit had $4.1 billion of revenue last year and an operating loss of $104 million. DaVita paid $4.4 billion for the physician-network business in 2012, but has sold small chunks and acquired other businesses since.

DaVita says it plans to focus on its kidney-dialysis business, and use the money for share repurchases, debt payment and general corporate purposes.

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