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UnitedHealth Group, parent company of major US health insurer UnitedHealthcare, is reportedly planning to acquire payments firm Equian for $3.2 billion, per The Wall Street Journal.
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Equian, which is currently owned by private-equity group New Mountain Capital, offers payments processing services for healthcare companies and insurers; it analyzes claims both before and after they're paid to find inappropriate or unnecessary bills and blocks or recovers overpayments.
UnitedHealth will likely integrate Equian into Optum, its health-services arm that caters to insurers, hospitals, and other healthcare companies.Here's what it means: Healthcare payments are still largely hampered by manual and paper-heavy processes, indicating gaps in the space that need streamlining.
The bigger picture: This acquisition could ultimately cement Equian as a leader in the healthcare payments space.
- Equian will gain an unrivaled reach that could substantially boost its payments volume. UnitedHealth is valued at about $235 billion and UnitedHealthcare is the largest health insurer in the US. So, while several major payments players are moving into the healthcare space, Equian is likely to have a strong competitive advantage.
- And UnitedHealth can tap into Equian's healthcare payments expertise to streamline processes and cut costs, while branching into new areas.Equian handles more than $500 billion in healthcare claims annually and serves nine of the 10 largest healthcare companies. Together, the firms could develop solutions to streamline healthcare payments to capitalize on the growing opportunity. And, because Equian serves insurers outside the healthcare industry, it could allow UnitedHealth to extend Optum's offerings beyond healthcare, per The WSJ.
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