Humana to pay $790 million for clinic chain

Health insurer Humana plans to buy Concentra, a chain of urgent care and worksite clinics, for $790 million, the Louisville, Ky.-based health plan announced Nov. 22.

Humana said it had been looking for acquisitions that could help it diversify and grow the company.

The deal is pending regulatory approval. Absent any objections, it is expected to close before the end of 2010.

Concentra is based in Addison, Texas, and employs more than 700 physicians, most of whom work in its clinics, Concentra spokesman Matt Longman said. It operates about 300 urgent care and occupational health clinics for the public, and 240 worksite clinics. Concentra is privately held, while Humana is shareholder-owned.

Humana's stock price rose from $55.73 to $58.34 on heavy trading on news of the acquisition Nov. 22.

The acquisition marks the return to managing health facilities for Humana, which once owned a hospital chain but sold off that business in 1993.

Humana Chair and CEO Mike McCallister, speaking Nov. 18 at the company's annual investor day in Louisville, didn't let on that the deal with Concentra was imminent, but did hint that the type of deals Humana might be looking for would involve vertical integration -- hospitals, clinics and doctors that would complement the insurance business.

"As you look at the changing dynamics out there with the consolidation of providers and the things that are going on, at the end of the day, our core product is dependent on a delivery system that makes sense," he said.

He said Humana had no intention of replacing its network with owned hospitals and employed physicians but acknowledged that it might make sense for the company to dip its toe back into that side of health care.

About 3 million Humana members live near a Concentra facility, and the chain of clinics already were in-network for Humana members, Humana spokesman Jim Turner said.

Concentra sold its workers' compensation business to Coventry Health Care in 2007 for $387.5 million.