The news: CVS Health plans to bid for value-based care (VBC) healthcare analytics company Signify Health this week, per WSJ. Other managed-care providers and private equity firms are also bidding for the company.
How we got here: During its latest earnings call, CVS Health CEO Karen Lynch said the companyplans to pursue M&As to advance its primary care reach.
That’s not surprising. One month ago, CVS reportedly approached primary care disruptor One Medical for a sale. Talks never materialized, though. Shortly after, Amazon swooped in and bought One Medical for nearly $4 billion.
CVS could be eyeing SIgnify Health as an alternative to One Medical.
2 ways a Signify purchase would boost CVS’ primary care strategy:
1. Expanding CVS’ physician network—a core component of CVS Health’s retail strategy.
Signify Health acquired accountable care organization Caravan Health in February 2022. As a result, Signify Health’s network now includes 200+ health systems, 100 Federally Qualified Health Centers (FQHCs), and 10,000+ primary care practices.
A massive physician network is exactly what CVS is looking for in a M&A deal. Unlike retail clinic competitors like Walmart (which mainly hires nurse practitioners), CVS wants its new primary care clinics to be primarily physician-led.
2. Inheriting Signify Health’s established home care business—an area that CVS wants to amplify this year.
Signify Health offers in-home health assessments and engages patients with SMS, email and telephone reminders in between visits. That could be an attractive proposition for CVS.