Jun 19, 2019 - Health

FTC forces UnitedHealth to sell part of its DaVita acquisition

The Federal Trade Commission building.

FTC headquarters in Washington. Photo: Jeffrey Greenberg/Universal Images Group via Getty Images

The Federal Trade Commission approved the $4.34 billion sale of DaVita's physician unit to Optum on Wednesday, a growing division of UnitedHealth Group; but Optum will be required to divest DaVita's large physician operations in Nevada to clear antitrust concerns.

The big picture: The deal, which has been under FTC review for 19 months, allows UnitedHealth to continue its conquest of all aspects of the health-care system — in this case, as a health insurer and care provider.

Details: The agreement stipulates Optum will have to sell DaVita's primary care group in the Las Vegas area to Intermountain Healthcare, a hospital system based in Utah. Those terms were not disclosed.

  • Optum already owns the other large physician group in the Las Vegas area, so if it acquired DaVita's operations, it would control 80% of the physician market, which "would allow UnitedHealth Group to exercise market power" and raise prices at will to other insurers, the FTC said in its complaint.
  • Because UnitedHealth is also the largest Medicare Advantage insurer in the area, controlling the 2 largest physician groups would allow UnitedHealth to charge rival plans more or exclude its doctors outright from competitors' networks.

That's not all: Colorado's attorney general negotiated a separate settlement to address anticompetitive concerns.

The bottom line: DaVita will now focus on its core dialysis business, while UnitedHealth maintains its position as one of the largest employers of doctors and biggest insurer for seniors.

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