Yesterday, the U.S. Department of Justice (DOJ) filed a proposed settlement that would allow UnitedHealth Group (NYSE: UNH) to acquire Amedisys (Nasdaq: AMED). For the home-based care industry, the merger would create an additional level of competition while verifying the value of its services, according to experts. “For smaller providers, this raises the stakes,” Benjamin […] The post Amedisys, UnitedHealth Merger Would ‘Raise Stakes,’ Create Opportunities For Home Health Providers appeared first on Home Health Care News.
Yesterday, the U.S. Department of Justice (DOJ) filed a proposed settlement that would allow UnitedHealth Group (NYSE: UNH) to acquire Amedisys (Nasdaq: AMED). For the home-based care industry, the merger would create an additional level of competition while verifying the value of its services, according to experts.
“For smaller providers, this raises the stakes,” Benjamin Bogan, partner and managing director at health care M&A advisory firm Stoneridge Partners, told Home Health Care News in an email. “Competing with an integrated payer-provider network like Optum can be increasingly difficult, especially in overlapping markets. On the flip side, it opens up strategic opportunities for nimble, high-quality operators to position themselves as local high-quality options or potential acquisition targets for other consolidators who want to remain competitive.”
As part of the DOJ’s proposed settlement, UnitedHealth and Amedisys must divest at least 164 home health and hospice facilities, worth approximately $528 million in annual revenue.
Pennant Group (Nasdaq: PTNG) announced on Thursday that it planned to acquire between 38 and 50 agencies from Amedisys and UnitedHealth, which would cost between $113 million and $147 million. Amedisys announced in May that it had agreed to divest home health and hospice centers to Pennant and BrightSpring Health Services (Nasdaq: BTSG).
Smaller, mid-market regional players are most likely to benefit from the divestitures, according to Widmar.
“I could see some meaningful discounts happening, because I do think the market has a little bit of leverage over United with these locations,” Joe Widmar, director at West Monroe, a Chicago-based business and technology consulting firm, told HHCN. “But I could also see it normalizing a little bit, given what I expect to be a pretty hefty number of buyers looking at these locations.”
The home health industry overall will also enjoy added evidence that its industry is attractive.
“UnitedHealth, despite their troubles in recent days, is still committed to that strategy. I think that’s good for the industry,” Tao Qiu, equity research analyst at financial services group Macquarie Group, told HHCN.
While some home health players stand to benefit from the purchasing of potentially discounted agencies and the broader proof of home health’s value, the deal could also cause problems for some providers.
Providers in overlapping markets would not just compete for patients. They would struggle to attract clinicians, an already taxing problem.
“There’s a concern, both from a labor standpoint and maintaining fair, competitive wages for clinicians who are within the home health industry and are seeking careers in the home health industry,” Widmar said. “There’s a whole lot of purchasing power there with that size of an enterprise. It’ll just be that much harder to attract talent away from those home health businesses in the future.”
The proposed settlement was not surprising, experts told HHCN, and indicates the Trump administration’s approach to dealmaking activity.
“Investors and company management view the current administration as business-friendly, and there is no indication that that’s not the case,” Qiu said. “From a holistic perspective, the current administration will be more willing for some of these deals to go through because it’s just a natural process of consolidation through tough times.”
The settlement may also signal that the DOJ is willing to “forego more standard operating procedure in favor of compromise,” according to Widmar, and signal that the current DOJ is willing to come to mutually beneficial outcomes quicker than others.
For UnitedHealth, which has experienced a bevy of well-publicized challenges, wrapping up the Amedisys deal is a bit of positive news that could help the company’s trajectory for the rest of 2025, Widmar said.
“At this point, I see a struggling United trying to make the best of this transaction,” he said. “It will probably take a while for the fruits of their investment here to really play out in their favor. … They’re probably looking to put this behind them at this point, and pursue the investment thesis they had from the get-go with Amedisys.”
The deal makes UnitedHealth an even more powerful player in the home health industry, Widmar said. It also hastens the growing trend of consolidation in the home-based care industry.
“If the merger is finalized, it will further accelerate the trend of consolidation and vertical integration in home-based care, which CMS has pushed with PDGM and other industry consolidation decisions in reimbursement and regulation,” Bogan said. “UnitedHealth/Optum has a large share of primary care, post-acute care, insurance and supporting services. Adding Amedisys deepens that integration, giving Optum an even bigger footprint in patient pathways from hospital to home.”
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