Cardinal Health is moving into the home medical care market with the $2 billion acquisition of AssuraMed, a privately-held provider of direct-to-consumer medical supplies to patients. The deal will provide Cardinal Health with an integrated delivery network from the hospital to the home to better serve an aging population with chronic conditions.

It also signifies the growing importance of treating patients in the home setting as healthcare providers look for ways to cut costs by keeping people out of hospitals whenever they can. “This is a platform opportunity for Cardinal Health products and services which will be increasingly important as the delivery of care migrates to more cost-effective settings,” says George Barrett, chairman and CEO of Cardinal Health.

The acquisition of AssuraMed is part of Cardinal’s mission to be “essential to care,” says Barrett, enabling it to serve patients recovering from acute episodes or suffering with chronic diseases. The deal extends Cardinal’s customer base to smaller service providers such as retail clinics, physicians’ offices, and home health agencies.

“This acquisition further aligns us with key trends including demographic shifts and increased consumerism,” says Barrett.

AssuraMed is a mail order provider of disposable medical products to chronic disease patients, delivering more than 30,000 products to more than 1 million customers nationally. Annual sales reached $1 billion in 2012. Once the deal is completed, Cardinal Health will supply patients with product lines including ostomy, diabetes, insulin therapy, urological, wound care, and incontinence, as well as some of its own products.

Cardinal Health is a $108 billion healthcare services company involved both in manufacturing medical products, and distributing drugs and medical products to hospitals, clinics, and pharmacies globally. In 2010 it bought the specialty pharmaceutical services provider Healthcare Solutions for $517 million in upfront cash and up to $150 million in earn-outs over three years. It also paid $1.3 billion to acquire Kinray, the largest private pharmaceutical distributor serving the New York metropolitan area, to expand its reach in northeastern United States.

Earlier in February of this year, Cardinal Health expanded its presence in the rapidly growing Chinese healthcare market, paying $120 million to acquire six Chinese drug distributors. These came on top of its 2010 acquisition of Chinese drug distributor Zuellig Pharma, China’s largest pharmaceutical importer at the time, with annual sales of more than $1 billion.

Cardinal Health will finance the deal with cash and $1.3 billion in new senior unsecured notes for which it has already received commitments. It expects the acquisition to close in April and be immediately accretive to earnings. Shares rose 1.2 percent following the announcement.