UnitedHealth wins approval to acquire DaVita medical unit

Bloomberg

UnitedHealth Group Inc. won US antitrust approval for its $4.3 billion acquisition of DaVita Inc.’s physician practice group, letting the health conglomerate close a deal it struck 19 months ago to expand its business of taking care of patients directly.
The Federal Trade Commission said that it had signed off on the tie-up after UnitedHealth agreed to sell assets to resolve competition problems in the Las Vegas area. UnitedHealth, the US’s biggest health insurer, will add DaVita’s medical clinics to the 35,000 physicians who already work for its Optum unit. DaVita shares closed up 3.1 percent to $51.27. UnitedHealth rose
1.8 percent to $250.19.
Policy makers have become more concerned about how consolidation in the health-care industry affects the price of care. A Trump administration report in December took note of “a level of consolidation that is changing the competitive landscape for the worse,” and recommended reducing regulations and making other changes to improve competition.
Optum said in a statement that the unit provides services to about 80 health-care plans and a total of 16 million patients. The company is one of the US’s biggest employers of doctors.
The settlement with the FTC followed a separate agreement announced with Colorado Attorney General Phil Weiser.
Weiser said that without condition imposed on the deal, UnitedHealth would gain the power to raise prices on elderly consumers enrolled in Medicare plans offered by private companies, known as Medicare Advantage. He criticised the FTC for not taking action in his state, saying the agency “declined to seek any remedies to protect Colorado consumers.” “The merger would result in reduced competition, higher health-care costs, reduced benefits, and fewer choices for seniors,” Weiser said. “We are taking action to protect older Coloradans from increased prices and decreased options in health care.”
Under the FTC settlement UnitedHealth will sell DaVita’s health-care prov-ider organisation in the Las Vegas area to Intermountain Healthcare, a Utah-based health-care provider and insurer. Without the sale, the deal would increase costs to Medicare Advantage insurers, the FTC said.