Humana Moves Forward with Kindred Purchase and Walmart is Interested

Humana has been allowed to move forward with the ability to purchase a 40% stake in Kindred at Home.  The insurer also has the first right to purchase the additional 60% of Kindred at any moment. The $800 million deal is expected to close this coming summer.

This deal is raising eyebrows amongst many, not only for the possible lack of patient choice but also the ability for an insurer to now have more direct control over the care of patients. For patients and providers, the ability to choose a home health agency that is outside of the Kindred network may now be limited. We should expect Humana to slowly start dropping providers from its network in areas where Kindred provides home health services.

Walmart, the department store chain, is interested in Humana at the same time that Humana works on the Kindred deal.  Building on an already existing relationship between the two companies for pharmaceutical deals, Walmart is now interested in purchasing the entire Humana enterprise.

Humana is worth about $37 billion and Walmart would be expected to pay a premium.  This transaction is amongst many major consolidations expected this year include the CVS-Aetna merger, Cigna’s purchase of Express Scripts, and Humana purchasing Kindred.

If Walmart entering healthcare isn’t bad enough, Amazon is also testing the waters with partners.  Warren Buffet’s Berkshire Hathaway and JP Morgan are in talks with Amazon to form their own joint venture.  Although the details of this new group are not really known, you can expect it to be a powerful player should the deal happen.

When will it all end? We don’t know just yet.  As retail merges with healthcare you can bet that some of the ability to provide customized care will likely be on the chopping block in favor of more global solutions that favor profit over patient.

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