LifePoint Health is set to acquire post-acute healthcare services company Kindred Healthcare and invest $1.5 billion over three years across the combined organization, the Tennessee-based for-profit provider announced.
The purchase adds 62 long-term acute care facilities, 25 inpatient rehabilitation facilities, more than 100 acute rehabilitation facilities and two behavioral health facilities to LifePoint, which already owns and operates 87 hospitals, over 50 post-acute service providers and facilities and a few dozen outpatient facilities.
The resulting organization will staff roughly 77,000 employees across the U.S.
LifePoint said it expects the deal to go through during the fourth quarter of 2021, pending regulatory review and other customary closing conditions.
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Although the terms aren’t being shared immediately, the system said it anticipates providing additional information on the acquisition—including financing, organizational structures and staffing updates—prior to the close of the transaction. LifePoint did note that no COVID-19 relief funds were used to finance the purchase.
By purchasing Kindred, LifePoint said it will be creating a network capable of treating patients across the continuum of care. The system’s collection of community-based hospitals and other entry points will be positioned to connect patients to Kindred’s long-term acute care, rehabilitation and behavioral health services, the system wrote.
LifePoint asserted in the announcement that the combination of their services was not driven by organizational cost savings but instead reflects an effort to “improve healthcare outcomes and access without increasing costs for patients.”
The company also noted it would continue Kindred’s growth strategy of partnerships and joint ventures with well-known health systems, payers and other providers as it looks to push into new regions.
“Kindred’s focus on healing and hope, provided through its long-term acute care hospitals, rehabilitation centers and most recently its behavioral health services—an important and growing need across the country—is highly complementary to the current LifePoint network,” David Dill, president and CEO of LifePoint, said in a statement. “We are honored to welcome Kindred’s talented group of employees and providers into the LifePoint family. We share a commitment to partnerships to benefit patients, and together, we will advance clinical and quality excellence, make healthcare more accessible and support healthier communities.”
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The announcement also included word that LifePoint would be investing $1.5 billion over a three-year period across the numerous communities that fall within the combined organization’s markets.
More specifically, the money will be going toward technology, digital tools and other equipment that increases local access to services; projects aimed at improving care delivery and adding new access points to care; and professional growth among employees, particularly nurses and other front-line staff, LifePoint said.
“Kindred and LifePoint have highly complementary capabilities and together we will be poised to further improve patient care across the healthcare continuum,” Benjamin Breier, CEO of Kindred, said in a statement. “The combination with LifePoint also creates enhanced career development and advancement opportunities for our Kindred teammates who have been the driving force behind our mission of delivering hope and healing to the most medically complex patients. We are excited to move forward and realize the benefits of this combination for our patients and their families, our joint venture partners and our team members.”
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Founded in 1985 as Vencor, Louisville, Kentucky-based Kindred’s history includes time as a public company on the New York Stock Exchange and a slew of mergers and acquisitions to grow its service offerings.
The post-acute care company went private in 2018 with its $4.1 billion joint acquisition by Humana; TPG Capital; and Welsh, Carson, Anderson & Stowe. Earlier this year Humana exercised its right to break off and purchase Kindred at Home, Kindred’s home health services business, for $5.7 billion while simultaneously divesting its share of Kindred’s remaining post-acute care offerings.
Brentwood, Tennessee-based LifePoint Health was similarly taken private in 2018 when it was purchased by Apollo Global Management for $5.6 billion and merged with the private equity firm’s RCCH HealthCare Partners. Apollo said at the time that the merger would create a system with revenues exceeding $8 billion.
LifePoint currently operates campuses across 29 states and staffs more than 53,000 employees. It had recently agreed to sell off three of its South Carolina hospitals and other facilities employing more than 2,300 staff to Prisma Health but, due to regulatory challenges, called off that deal in April.