UnitedHealth Group’s Optum announced on Wednesday that it would acquire Change Healthcare with the aim of more effectively simplifying core clinical, administrative and payment processes.
The companies said that Change Healthcare would join with the OptumInsight unit to provide software and data analytics; technology-enabled services; and research, advisory and revenue cycle management offerings.
Optum will pay about $8 billion in cash for the company and acquire about $5 billion of Change Healthcare debt, for a total valuation of $13 billion.
“Together we will help streamline and inform the vital clinical, administrative and payment processes on which healthcare providers and payers depend to serve patients,” said Andrew Witty, Optum CEO and UnitedHealth Group president, in a statement.
“We’re thrilled to welcome Change Healthcare’s highly skilled team to create a better future for healthcare,” Witty continued.
WHY IT MATTERS
The organizations pointed to the joint company’s potential to inform clinicians on patient care decisions, noting Change’s technology for integrating evidence-based criteria into the clinician workflow and Optum’s clinical-analytics expertise.
They also highlighted the need to reduce administrative waste across the health industry, and propose to combine Optum’s data analytics with insights based on claims transactions via Change’s network.
They flagged the opportunity for improvements in payment systems, stressing the possibility for providers to get paid “more quickly, accurately and reliably” and for consumers to have more streamlined and transparent healthcare cost management.
Patient engagement and population health tools were also in the mix, with the companies touting alignment with incentive programs rewarding healthy behaviors.
“We are delighted to have in Optum a partner that shares a common vision of creating a better future for healthcare for the people and communities we serve, and see this combination as in the best interests of all of our stakeholders,” said Howard Lance, chair of the board of directors of Change Healthcare, in a statement.
THE LARGER TREND
The acquisition comes on the heels of Change’s unveiling of its new social determinants of health tools this past November, designed to help providers, payers, life science companies and others make better use of socioeconomic and geodemographic information.
The new offering was aimed at helping organizations across the healthcare ecosystem to better assess and implement social programs to help reduce costs and improve patient outcomes – among the goals mentioned in the Optum acquisition announcement.
Change also made moves last year to expand its foothold into the imaging landscape, acquiring Nucleus.io this past August.
ON THE RECORD
“This opportunity is about advancing connectivity and accelerating innovations and efficiencies essential to a simpler, more intelligent and adaptive health system,” said Neil de Crescenzo, president and CEO of Change Healthcare, who will be OptumInsight’s CEO upon the deal’s closing.
“We share with Optum a common mission and values and importantly, a sense of urgency to provide our customers and those they serve with the more robust capacities this union makes possible,” de Crescenzo continued.