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Anthem to Buy Aspire Health for Better Healthcare Service

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Anthem, Inc. (ANTM - Free Report) has announced that it will acquire Aspire Health, a non-hospice, community-based palliative care provider. The agreement is aimed at providing unique and innovative medical care in the community outside hospitals. Financial terms of the transaction have not yet been disclosed. The acquisition, pending standard closing conditions and customary approvals, is expected to wrap up in the third quarter of 2018.

The company anticipates the buyout to be neutral to 2018’s earnings but accretive to 2019’s bottom line.

Buyout Benefits

Founded in 2013, Aspire provides services under contracts with above 20 health plans to patients across 25 states. The company identifies patients suffering serious illnesses and helps them fight fatigue, shortness of breath, nausea, appetite loss and depression through supreme medical care.

Anthem already owns Blue Cross and Blue Shield plans in 14 states and purchasing Aspire would help it enhance its medical care business and provide better services along with its other clinical care assets such as CareMore Health and AIM. Through this transaction, Anthem plans to introduce advanced illness programs to provide optimum patient satisfaction through home-based care and reduce medical costs in the process.

Other recent acquisitions made by this Zacks Rank #2 (Buy) HMO are America’s 1st Choice, Health Sun, which expanded the company’s reach in the highly coveted Medicare market.

The health insurance industry is witnessing increased consolidation with a host of changes like rise in health care cost, shift to value-based care, heightened regulations, need for managing steep health care costs and augmented consumerism. In the same vein, two major integrations underway are Express Scripts Holding Company by Cigna Corp. (CI - Free Report) and that of Aetna Inc. (AET - Free Report) by CVS Health Corp. (CVS - Free Report) .

Share Price Performance

In the past year, the stock has rallied 27.86%, underperforming the industry’s growth of 31.6%. Nonetheless, effective capital deployment plan, growing membership strength and accretion from acquisitions are likely to help the shares bounce back.

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