What Optum’s $5.4B LHC Group Acquisition Signals for Senior Living

UnitedHealth Group (NYSE: UNH) has agreed to buy LHC Group (Nasdaq: LHCG) in a deal valued at more than $5.4 billion.

With the move, UnitedHealth is combining Lafayette, Louisiana-based LHC Group – one of the largest home health providers in the U.S. – and its Optum health care services arm, which is already integrated into UnitedHealth’s network.

The deal also links UnitedHealth with the largest senior living provider in the U.S., Brookdale Senior Living (NYSE: BKD), which began working with LHC Group after the home health company acquired Brookdale Health Services assets in 22 states from the operator’s joint-venture with HCA Healthcare.


The agreement calls for the acquisition of LHC Group’s outstanding common stock for $170 per share. The two companies expect the deal to close in the second half of 2022 subject to approvals and other conditions.

The combination of UnitedHealth’s Optum arm and LHC, along with other recent moves in the space, represent a seismic shift in the way care is delivered to older adults in yet another indication that home-based care is on the rise.

The transaction is also among the largest of its kind in the home-based care space in recent years. Optum, a population health care provider, last year acquired in-home medical care provider Landmark Health for more than $3 billion.


The transaction, which follows Humana’s acquisition of Kindred at Home last year, validates the home health model and its importance in the healthcare continuum, according to Stifel Analyst Tao Qiu.

“Aided by technology and Covid waivers, the concept of delivering more routine and convalescent care in the home setting was proven during the past two years,” Qiu wrote in a March 29 note to investors of The Pennant Group, Inc. (NASDAQ: PNTG). “The home health industry thus solidified its position as an integral part of the continuum of care and the lowest cost setting.”

LHC Group provides home health, hospice and home- and community-based services, as well as facility-based care. It has 964 locations across 27 states and the District of Columbia. The company logged total revenue of about $2.22 billion in 2021, according to Senior Housing News’ sister site, Home Health Care News.

For Optum, which works with over 100 health plans, the move is intended to expand value-based care capabilities along the full continuum of care in areas such as primary care, home and community care, virtual care, behavioral health and ambulatory surgery.

“We greatly admire how the people of LHC Group have created a culture that enables them to be a trusted health care partner to patients and their families when they need it the most, and we look forward to working with and learning from them,” Optum Health CEO Dr. Wyatt Decker, CEO said in the release.

For the senior living industry, UnitedHealth’s acquisition is yet another indication that care delivery is moving into the home. About $265 billion worth of health care services for older adults could shift from facilities to the home over the next three years, without reducing quality or access, according to a survey of physicians conducted by McKinsey & Co.

Senior living operators have in response clamored to gain a foothold in the space. For example, Bickford Senior Living launched a home care business last July in an effort partly to create relationships with prospects before they’ve committed to moving into a senior living community.

Bickford also is seeking to create an integrated healthcare network for residents to receive coordinated home health, home care, primary care, hospice and palliative care, according to the company’s executive vice president of operations, Alan Fairbanks.

“We can be that trusted advisor … through the conversations that we’re having with all providers,” Fairbanks said during a panel discussion at the 2022 NIC Spring Conference. “We can be that for a family versus them getting lost in this huge ecosystem of health care.”

And Optum and UnitedHealth are not strangers to the senior living sector. UnitedHealth has been behind some provider-led Medicare Advantage plans, including as a JV partner in Erickson Living’s Erickson Advantage. And Optum has been involved in delivering services to senior living residents on MA plans. In 2019, leaders with Erickson and Optum spoke on MA’s increasing role in senior living at an SHN Summit in Washington, D.C.

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