Humana has taken full control of home health and hospice provider Kindred at Home in an acquisition totaling $8.1 billion.
The health insurance giant announced Tuesday it is shelling out $5.7 billion to purchase the remaining 60% of interest in Kindred at Home. Humana previously purchased a 40% stake for $2.4 billion in 2018.
The acquisition, which is expected to close in the third quarter of 2021, is subject to customary state and federal regulatory approvals, said Mark Mathis, director of corporate communications for Louisville, Kentucky-based Humana, in an email. Until it closes, Humana and Kindred at Home will continue to operate as two separate businesses.
Kindred, with approximately 43,000 caregivers and locations in 40 states, provides home health, hospice and community care services to over 550,000 patients annually.
Post-acquisition, Kindred’s home health operations will be integrated into Humana’s home solutions business. It will also adopt the insurer’s payer-agnostic healthcare services brand CenterWell, becoming CenterWell Home Health.
“With the addition of Kindred at Home, Humana will have the geographic coverage, scale and breadth to offer care beyond just Humana members — also serving members of other health plans in a ‘payer-agnostic’ fashion,” Mathis said.
Since acquiring its minority stake in Kindred at Home in 2018, the companies have collaborated on several programs and initiatives. Through these collaborations, Humana ascertained that higher acuity patients can be cared for effectively at home and found that referring physicians will seek out home health providers, with a growing number of Humana members being served by Kindred at Home, Mathis said.
“These learnings increased confidence in our ability to successfully bring a value-based approach, focused on improving patient outcomes and reducing the total cost of care, to the home setting at scale,” he said.
The confidence translated into Humana purchasing the majority stake in Kindred at Home from TPG Capital, the private equity platform of global alternative asset firm TPG, and Welsh, Carson, Anderson & Stowe, a private equity firm focused on healthcare and technology.
But Humana does not intend to keep its majority stake in all of Kindred at Home’s operations. Though the provider’s hospice and community care operations are included in the current transaction, Humana plans to ultimately maintain only a minority interest in this portion of the asset. The payer is exploring options for divestiture.
The interest in home health skyrocketed during the Covid-19 pandemic, with many providers and payers entering into partnerships with companies offering care at home. Humana is no stranger to this trend, announcing its collaboration with DispatchHealth in February.
Further, home health received support from the government last year. The Centers for Medicare & Medicaid Services established the Acute Hospital Care At Home program in November, giving hospitals regulatory flexibility to treat eligible patients in their homes.
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