DaVita is selling underperforming managed-care unit for $4.9 billion


UnitedHealth's Optum unit will acquire the physician group from DaVita, a large for-profit chain of dialysis centers, for about $4.9 billion in cash, subject to regulatory approval. CVS stock dipped slightly on Wednesday following the UnitedHealth and DaVita deal.

UnitedHealth Group Inc announced on Wednesday about their plans to expand further its medical offerings with the deal of $4.9 billion to buy DaVita Medical Group, looking to bolster its primary and urgent care services.

The deal comes on the heels of this week's announcement that insurer Aetna will merge with CVS in a partnership that many believe will disrupt how healthcare is delivered in the country. The company already operates medical practices in Southern California and elsewhere, and it owns almost 250 MedExpress urgent-care clinics.

Insurers are increasingly working with doctors and hospitals, experimenting with different methods of paying for care and attempting to provide better oversight of potentially expensive chronic conditions like diabetes or heart failure.

Larry C. Renfro, the chief executive of Optum, said the acquisition "advances our shared goal of supporting physicians in delivering exceptional patient care in innovative and efficient ways".

UnitedHealth bought Surgical Care Affiliates for about $2.3 billion in March.

The recorded sales of DaVita's physician network is $4.11 billion previous year and had become a major drag on the company's financial performance in recent quarters. At the time, HealthCare Partners was the largest USA operator of physician groups and networks. Its shares are up 36.48% this year, while DaVita is higher by just 0.74%.

But the company has struggled with the physician operation. At the same time, DaVita has been under pressure in its main business because of scrutiny on the relationship of it and other kidney-care providers to a charity, American Kidney Fund, that has helped patients pay for health coverage. The transaction is expected to close in 2018.

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