Humana is spending $500 million to buy Metropolitan Health Networks, which operates several provider networks as part of its continued effort to boost its network of doctor groups.
With the acquisition of Boca Raton, Fla.-based Metropolitan, Humana gains a company experienced in providing and coordinating care for almost 90,000 Medicare and Medicaid patients. As part of the deal, Humana will pay off Metropolitan's $350 million debt, which increases the deal's value to $850 million, Bloomberg reported.
"We are completely convinced that integrated health care, as far and as fast as we can take it, is critical to the next chapter of what happens--especially in the Medicare business but potentially for the entire business," Humana CEO Michael McCallister said. "You're going to continue to see us work very quickly down that path."
Humana also announced two other acquisitions, the terms of which weren't disclosed. The insurer said it was buying Certify Data Systems, which helps share health information, and gaining a majority stake in MCCI Holdings, which provides care to Medicare beneficiaries, reported The Wall Street Journal.
These three new deals "significantly advanced our strategy of aligning physician pay to quality," Humana President and incoming CEO Bruce Broussard said in a statement.
Humana's three new agreements are "strategically the right move" and demonstrate Broussard's growth strategy, Ana Gupte, a Sanford C. Bernstein & Co. analyst, told Bloomberg. "All the moves drive Humana's prowess further up in coordinated care management and delivery which in our view is critical for the success" of private insurers covering Medicare patients, she added.
Meanwhile, Humana reported its third quarter net income dropped to $426 million from $444.8 million a year earlier. Its revenue increased to $9.65 billion from $9.30 billion, Reuters reported.