UnitedHealth to Buy DaVita's Physician Group For $4.9 Billion Cash

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The nation's biggest health insurer is spending almost $5 billion to buy hundreds of clinics, just three days after rival Aetna announced a tie up with CVS Health Corp.

The deal with Denver-based DaVita is mainly to provide the services of dialysis, will combine UnitedHealth's Optum unit with DaVita's physician network business that serves about 1.7 million patients each year through almost 300 clinics.

The proposed deal comes on the heels of news of another big insurer, Aetna, and its plans to merge with CVS Health.

6 it had agreed to buy DaVita's physician-network business for $4.9 billion.

DaVita Medical Group serves about 1.7 million people annually in California, Colorado and Florida, among other states.

Optum already operates more than 1,100 primary, urgent care and surgery centers through a business it has been expanding. While the combination with CVS allows Aetna to experiment with providing medical care in a retail setting, insurers are also looking to partner directly with doctors and health systems.

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"We also look forward to working closely with the leadership team of DaVita Medical Group to combine our capabilities and, supported by the data analytics and technology capabilities of Optum, enhancing patient care and the value we provide to the communities we serve".

The acquisition of DaVita Medical Group, which includes such high profile organizations as HealthCare Partners and the Everett Clinic, is the latest move by UnitedHealth to expand into the realm of delivering medical care as a way of reducing costs.

Last January, UnitedHealth also acquired a chain of surgery centers, a move the company said could lower the expense of having an outpatient surgery by more than 50 percent. The group employs around 2,200 health-care providers, including doctors, nurse practitioners and physician assistants. UnitedHealth has bought this Surgical Care Affiliates for about $2.3 billion in March. Aetna covers around 22 million people.

DaVita has said it will use the money from the sale for stock buybacks and repaying debt after the deal closes, which is expected to occur sometime next year.

UnitedHealth has said Optum aims to provide primary care and ambulatory services in 75 markets, representing about two-thirds of the USA population.

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