Just one week after its parent company UnitedHealth Group spent $5.4 billion on home health provider LHC Group, Optum, has continued the buying spree and announced the acquisition of Kelsey-Seybold Clinic, a large, multi-specialty group practice based in Houston, Texas. Financial terms of the transaction were not disclosed.
Founded in 1949 by Dr. Mavis Kelsey, Kelsey-Seybold Clinic is Houston’s premier multispecialty group practice with more than 500 physicians and allied health professionals practicing at more than 30 locations in the Greater Houston area. Kelsey-Seybold offers quality medical care in 55 medical specialties. The organization operates multi-specialty care centers, a cancer center, a women’s health center, two ambulatory surgery center locations and a specialized sleep center.
UnitedHealth Group’s Optum arm signed a deal to acquire the group practice weeks ago, according to multiple sources. If it closes, the deal represents another major investment in value-based care by adding a large, risk-bearing physician organization to the Optum network.
UnitedHealth has been aggressive in the M&A space, with many of its recent purchases joining the Optum fold. Its acquisition of LHC Group, one of the largest home health providers in the nation, amounts to about $6 billion with debt included. When that deal closes, UnitedHealth will fold LHC into its Optum subsidiary as part of its Optum Health arm, which is one of the country’s largest employers of physicians. LHC Group includes some 30,000 employees who provide more than 12 million in-home services each year.
In addition to the recent acquisitions of Kelsey-Seybold Clinic and LHC Group, Optum announced several other deals for companies in a variety of sectors. Back in January 2021, the company purchased Change Healthcare, a major digital health company focused on financial interactions among care providers, payers and consumers, for $13.7 billion. And in March 2021, it acquired Atrius Health, a Boston-based primary care provider with 715 physicians.
UnitedHealth’s aggressive acquisition strategy also comes as the company is gearing up to fight the Feds in the closing of its acquisition of Change Healthcare, which is valued at $8 billion in cash and $5 billion in debt. The Department of Justice sued to block the merger in late February, alleging that the combination could allow UnitedHealth to get a leg up on its competitors in the insurance space. In response to the legal challenges, Optum and Change Healthcare have further extended their merger agreement to December 31, 2022.
