Both companies have been in the news spotlight of late. CVS Health has been overt about its efforts to reach further into the home; it has been targeting traditional home health agencies, and it was reportedly interested in primary care provider One Medical (Nasdaq: ONEM).
Those others could include managed care companies and private equity firms, which also have been interested in purchasing home-based providers. The New York-based private equity firm New Mountain Capital is already a Signify investor, and it has been so for close to five years.“Regarding recent media reports focused on potential M&A, we do not comment on market speculation, and we will not answer questions on the topic,” Signify CEO Kyle Armbrester said Thursday on the company’s second-quarter earnings call.
The company partners with health plans, health systems, physician groups, employers and other health care providers to help enable at-home care through its proprietary technology and analytics. It additionally provides at-home evaluations, usually on behalf of Medicare Advantage plans. It conducted 624,000 of those in the second quarter alone.
As of recently, Signify’s business has materially changed. It announced in July that it would be leaving the Centers for Medicare & Medicaid Services’ (CMS) Bundled Payments for Care Improvement-Advanced (BPCI-A) program due to adjustments from CMS on trend calculations.
In the aftermath, the company has expressed its desire to lean further into its home and community services (HCS) segment.“This decision will allow us to invest more in supporting the growth of our in-home services, our total cost of care enablement platform, and the needs of our health plan and provider clients,” Armbrester said.
In addition to Signify’s core business, CVS Health may also be interested in Caravan Health, which was Signify’s first acquisition in February for $250 million. Caravan is an accountable care organization manager, but it also honed in on population health management and value-based payment programs.
While much of the mainstream coverage of CVS Health’s aggressive growth goals has been focused on the primary care side, the company has been keyed in on the home for the last year. It already has plenty of home-based care capabilities of its own – through Aetna and otherwise – including at-home infusion and kidney care, among others.
Regarding the topic of acquiring specifically to get into home health care, CVS Health CFO Shawn Guertin said in February that home-based care entities were “high on the list” when it came to near-term M&A.
“It’s hard to predict the exact order with which things will potentially show up, if this is something you decide that you’d rather acquire than build,” Guertin said. “But yes, absolutely, [we’re interested in] things that make sense to sort of extend the care continuum – particularly to a Medicare population. [That] would make a lot of sense and they’d be high on the list.”
A deal for Signify Health is not a shoo-in for a few reasons. Similar to the One Medical deal with Amazon, CVS Health could simply be outbid. It’s also not a certainty just yet that Signify Health will be acquired at all. Last week’s initial report from WSJ called it “far from guaranteed.”
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