Wednesday, August 26, 2015
Cardinal Health Inc. is acquiring a software and analytics company that helps health systems and insurers better manage the care of patients after discharge to keep them from returning to the hospital.
The $103 billion Dublin-based health-care distributor announced Tuesday it is acquiring 71 percent of NaviHealth, based in Nashville, Tennessee, for about $290 million in cash on hand, Cardinal said in a release. The transaction is expected to close within days, and Cardinal (NYSE:CAH) plans to acquire the rest of the business from founders and investors over the next four years.
Cardinal said 4-year-old NaviHealth is a leader in managing what's called post-acute care – an estimated $200 billion spent annually on nursing homes, rehabilitation facilities and home health care after hospital discharge. Hospitals now are penalized by Medicare when patients with certain conditions return within 30 days to the hospital for the same reason.
NaviHealth's software provides decision support services to physicians and helps manage so-called bundled payments, when a health-care facility or physician is paid one fee for everything that goes into, say, a rehabilitation session instead of each piece of equipment and labor. Cardinal said the company has achieved "significant savings" in claims for patients on Medicare Advantage plans. NaviHealth has customers spanning 2 million insured patients across 75 U.S. hospitals and physician groups.
NaviHealth CEO Clay Richards will continue to lead the business, which will become part of Cardinal's medical supplies and services segment. He'll report to Michael Petras, president of Cardinal Health at Home, the home-care division it started with acquisition of an Ohio company. Principal investor Welsh, Carson, Anderson & Stowe and other owners are to sell their combined 29 percent stake over four years.
Cardinal has been actively shopping the past year, adding a generics distributor, specialty drug distributor (also from Nashville), medical device maker and a maker of surgical gloves.
bizjournals.com
