When CVS announced its intention to purchase insurance giant Aetna for $69 billion, it sent shockwaves throughout the health care sector. Combining an insurance company with the pharmaceutical industry could have far-reaching ramifications. This isn’t the only deal potentially in the works, though, with Humana also in talks to acquire Kindred Healthcare and the impact on home care services could be significant.
Kindred Healthcare also maintains a large network of home care and hospice services throughout many states across the country. This merger would provide Humana a solid foundation of acute care from hospitals to home care and hospice.
As reported by CNBC in the Reuters-based article, Humana in talks to buy Kindred Healthcare with equity firms: Source:
“Humana has been investing significantly in its home health capabilities, Humana At Home, which the insurer touts as a compliment to its Medicare Advantage franchise. If the negotiations are successful, a deal could come as early as this week, the source said, asking not to be identified because the matter is confidential.
The Wall Street Journal, which first reported on the talks, said the deal could value Kindred at $9 per share. On Friday, the company’s stock closed at $8.60, giving it a market value of $750 million.”
After the federal government blocked two major potential mergers for health insurance companies, there has been a vested interest to push and find other ways to expand and grow. That appears to be leading some to focus on acute care, as is the case in this merger deal. Some argue that allowing health insurance companies to ultimately control a large portion of home health services and hospice care, it may limit options for those who are in need of these services, most notably aging and disabled adults across the country.
Advocates for these types of mergers, though, point out that consolidation can help to improve access to these services and lower costs. While the vast majority of men and women who ultimately rely on home care receive support through Medicaid for these services, that is only a short-term option. People who require longer-term care may have to rely on personal insurance plans or pay out of pocket.
It’s unclear how a merger such as this would affect the cost of in home or hospice care, but with these recent developments, the home care industry is going to be facing new challenges in the years ahead. There’s been no word yet whether the federal government would approve a merger such as this.
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