Earlier this month, CVS Health (NYSE; CVS) announced that it would be acquiring home-based healthcare provider Signify Health
"Signify Health will play a critical role in advancing our health care services strategy and gives us a platform to accelerate our growth in value-based care," CVS Health President and CEO, Karen S. Lynch, is quoted in a company release. "This acquisition will enhance our connection to consumers in the home and enables providers to better address patient needs as we execute our vision to redefine the health care experience."
Signify operates in all fifty states, with more than 10,000 clinicians, nurse practitioners, and physician assistants expected to conduct a total of roughly 2.5 million home visits in 2022, including both in-person and virtual appointments. During the visit, the clinician can assess the patient's needs before recommending appropriate follow-up care.
"As we carefully considered our long-term strategic options, we determined that CVS Health is the ideal partner," Kyle Armbrester, CEO of Signify Health, is quoted in a press release. "We are both building an integrated experience that supports a more proactive, preventive and holistic approach to patient care, and I look forward to executing on our shared vision for the future of care delivery."
Last year, CVS announced that it would be closing 900 locations over the next three years. With more and more consumers doing their shopping online, CVS and pharmacies like it have been struggling to maintain sales. Many have been looking for new ways to connect with patients, including by serving as alternatives to traditional hospital care.
"CVS doesn't want to sell us just prescriptions and toothpaste; it wants to be our primary care provider," professor Erik Gordon at the University of Michigan's Ross School of Business said. "With stores that are convenient to many of us, it is going to be a big player."
CVS currently employs around 40,000 clinicians, pharmacists, and practitioners at its nearly 10,000 pharmacy locations, as well as offering a range of minor medical care at its 1,100 MinuteClinics.
"We've been very clear about what we were looking for in expanding our health services," Lynch said in an interview, "either be it primary care, provider enablement or in the home, and Signify Health clearly checks off two boxes: into the home and provider enablement."
The announcement of the deal, which is awaiting regulatory and shareholder approval, led to a 7% increase in Signify's shares, and less than a 1% bump for CVS. The deal is expected to be completed sometime in the first half of next year.
According to professor of molecular medicine at Scripps Research in San Diego Dr. Eric Topol, at-home visits like those offered by Signify are cheaper for insurance companies to cover, including providers like CVS's Aetna insurance.
"If you're looking at it from Aetna's standpoint, this is a way to save big, big expenditures for their people they cover," says Topol.
The health care industry has seen a series of major shakeups in recent months, including several major acquisitions by Walgreens
