UnitedHealth Group’s Optum arm is buying Amedisys Inc. (Nasdaq: AMED) in a transaction totaling about $101 per share, or about $3.3 billion.
The all-cash deal follows and supersedes a previous offer to acquire Amedisys from home infusion company Option Care Health (NASDAQ: OPCH) for $3.6 billion funded by a combination of cash and shares.
“The combination of Amedisys with Optum unites two organizations dedicated to providing compassionate, value-based comprehensive care to patients and their families,” Amedisys wrote in an announcement.
Baton Rouge, Louisiana-based Amedisys provides home health, hospice and higher-acuity care services across 522 locations.
With the deal, Optum is likely to be the largest home health provider in the United States in part thanks to the acquisition of home health player and Brookdale service provider LHC Group last year for $5.4 billion.
While that represents a seismic change for the home health industry, the deal is also significant for the senior living operators given that, as of late 2019, between 5% and 10% of Amedisys’ business was taking place in senior living communities, CEO Paul Kusserow had previously estimated.
With Brookdale, Optum, LHC Group and Amedisys now collaborating in one way or another, the deal showcases evolutions underway within the senior living care continuum. The deal also tightens the grip of industry “payviders,” who stand to benefit by more closely controlling how care and services are delivered in senior housing settings.
But that might not stop with home care. Senior living communities could present attractive targets for these kinds of companies as more residents enroll in Medicare Advantage plans owned by big insurers in the years ahead.
And it’s clear that UnitedHealth has long has its eye on senior housing. Nearly two decades ago, UnitedHealth partnered with Erickson Living to Launch an Erikson-based Advantage Medicare Advantage plan. As of 2019, that plan served some 5,000 residents.