UnitedHealth part of $2.2B acquisition of hospitalist staffing company

UnitedHealthcare
UnitedHealth's OptumHealth is one of two primary owners in a $2.2 billion acquisition of Sound Inpatient Physicians Holdings. (jetcityimage/Getty)

UnitedHealth Group’s OptumHealth is part of a $2.2 billion deal to acquire a Washington-based hospitalist staffing company.

OptumHealth will be one of the two primary owners of Sound Inpatient Physicians Holdings, a physician staffing firm based in Tacoma, Washington, according to a ratings action issued by Moody’s on Thursday.

UnitedHealth's care delivery arm will own the company alongside the private equity firm Summit Partners, which agreed to purchase the controlling stake of Sound from the Germany-based dialysis provider Fresenius Medical Care in April.

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The announcement from Fresenius referenced an “investment consortium led by Summit.” UnitedHealth’s involvement has not been previously disclosed.

A UnitedHealth spokesperson had no immediate comment.

Moody’s assigned Sound Inpatient Physicians Holdings a “stable” rating based, in part, on the ownership stake by OptumHealth. The rating agency noted that “Sound will remain a highly leveraged physician staffing company with a high concentration within hospital medicine.”

RELATED: Optum’s $4.9B deal to buy DaVita Medical Group further expands UnitedHealth’s care delivery portfolio

UnitedHealth’s involvement in the transaction comes as the company is putting a bigger emphasis on care delivery, particularly through provider acquisitions. Last year, the insurer bought DaVita Medical Group for $4.9 billion. The acquisition added nearly 300 medical clinics across six states.

Last year, OptumHealth brought in $20.6 million in revenue and $1.8 million operational earnings.

During a presentation (PDF) at Berstein’s annual conference, CEO David Wichmann indicated that although the company’s M&A allocation was equally divided between benefits, services and international expansion between 2008 and 2012, the vast majority of M&A capital has been devoted to services over the last five years. And there are no signs the company is slowing down.

Although Wichmann did not mention the Sound acquisition, he pointed to new OptumCare markets “in the formative stages” of value-based payment approaches.

“We will methodically spend a decade or more to accomplish our long-term goals of entering and building out care delivery operations in 75 targeted markets serving 60% of the U.S.  population,” he said.

Moody’s expects Sound’s revenues to grow 10% over the next two years, reaching $1.4 billion in 2019. The staffing firm has roughly 3,500 employees.

RELATED: UnitedHealth expects 150M members to be in value-based programs by 2025

Moody's noted that Sound’s rating was constrained because it relies on profits generated through the Centers for Medicare & Medicaid Services’ Bundled Payments for Care Improvement Initiative.

“The stable outlook reflects Moody's view that Sound will remain a highly leveraged physician staffing company with a high concentration within hospital medicine,” Moody’s analysts wrote. “It also reflects Moody's expectation that Sound will grow primarily through organic means.”