Humana Buying Out Partners in Home-Health Business
April 27 2021 - 6:04PM
Dow Jones News
By Micah Maidenberg
Humana Inc. agreed to take full control of home-health provider
Kindred at Home by buying out two investors that currently own the
majority of the company, deepening its exposure to care services
delivered outside traditional settings.
Humana on Tuesday said it would pay $5.7 billion to acquire the
60% interest in Kindred from the private-equity arm of TPG and
Welsh, Carson, Anderson & Stowe, another private equity
firm.
The health-insurance company said it owns 40% of Kindred, a
business it described as the nation's largest home-health and
hospice provider, with 43,000 caregivers working in 40 states.
Demand for home-based health care has been rising as the U.S.
population has aged, and some forecasters have predicted that the
need for aides who carry out such work would exceed supply in the
coming years. Spending on home-health services was forecast to rise
to $201.3 billion by 2028, up from $116.2 billion last year,
according to projections last year from staff at the federal
Centers for Medicare and Medicaid Services.
In addition, President Biden's proposed infrastructure bill
includes $400 billion to provide seniors with more medical care at
their homes.
Humana said the proposed acquisition reflects its "commitment to
investing in home-based clinical solutions that drive improved
patient outcomes, increased satisfaction for patients and
providers, and value for health plan partners."
Kindred's home-health operations will be folded into the
company's home-solutions business and will take on the brand
CenterWell Home Health. Meanwhile, Humana said it plans to maintain
only a minority interest in Kindred's hospice and community-care
operations. Those assets could be spun off into an independent
company, or dealt with in another type of transaction, Humana
said.
In 2017, Humana, along with TPG's private-equity arm and Welsh,
Carson, Anderson & Stowe agreed to purchase what was then
called Kindred Healthcare Inc. As part of that deal, Kindred at
Home was separated into a joint venture that Humana owned 40% of,
with the investment firms owning the rest, according to a statement
from the time.
Susan Diamond, president of Humana's home business, said in a
statement Tuesday the company initially decided to get involved
with Kindred at Home because it believed a key component of
delivering care in the future would include the ability to provide
home-based services to consumers at scale.
The company's work with Kindred has helped Humana to learn more
about clinical models and supporting patients receiving care in
their homes, among other lessons, she said.
Write to Micah Maidenberg at micah.maidenberg@wsj.com
(END) Dow Jones Newswires
April 27, 2021 18:49 ET (22:49 GMT)
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