CVS Health to Acquire Dallas-Based Signify Health for $8 Billion
Dallas-based Signify Well being will likely be acquired by CVS Well being, the biggest healthcare firm within the nation, for $8 billion pending shareholder approval. The transfer comes lower than two years after Signify went public and can assist CVS Well being embrace value-based and home-based care.
Signify is a platform that helps coordinate home-based care between sufferers and suppliers and allows value-based care by working with each well being plans to ship care to sufferers. It has been an up and down 12 months for the corporate. Signify acquired an accountable care group known as Caravan Well being in February for $250 million however later introduced it was exiting the Middle for Medicare and Medicaid Companies bundled funds plan. Quickly after the IPO, the inventory peaked at $40 per share, but it surely has been dropping since. This July, the worth bottomed out at simply over $11 per share. The value jumped in August when rumors of a Signify sale have been reported, and CVS Well being seems to amass the corporate at $30.50 per share.
Signify was fashioned in 2018 when personal fairness agency New Mountain Capital acquired two dwelling well being firms and introduced in CEO Kyle Armbrester to steer the brand new firm. The acquisition made Signify the biggest gamers within the business, with a mixed $400 million in enterprise in 2018. Signify seems to attach with 2.5 million sufferers within the dwelling via in-person and digital care, spending greater than twice the time suppliers spend with sufferers within the workplace. The corporate additionally has relationships with 50 well being plans across the nation.
“As we rigorously thought-about our long-term strategic choices, we decided that CVS Well being is the best associate, given its deal with increasing entry to well being providers and serving to customers navigate to one of the best websites of care,” Armbrester stated through launch. “We’re each constructing an built-in expertise that helps a extra proactive, preventive and holistic method to affected person care, and I stay up for executing on our shared imaginative and prescient for the way forward for care supply.”
Armbrester will proceed to steer Signify following the transaction as a part of CVS Well being, which has a footprint in almost each side of healthcare and 300,000 staff, together with greater than 40,000 physicians, pharmacists, nurses, and nurse practitioners. CVS and medical insurance supplier Aetna merged in 2017 within the largest transaction in healthcare historical past and CVS merged with Caremark to type pharmacy profit supervisor CVS Caremark in 2007.
Signify has a community of greater than 10,000 clinicians throughout all 50 states and a nationwide value-based supplier community. The know-how focuses on affected person engagement and outcomes, coordinating care with the totally different sectors of the business to enhance effectivity. The corporate has been lively in increasing providers and attain, merging with Treatment Companions in 2019 to develop its bundled care and value-based funds. Treatment and Signify have been each a part of New Mountain Capital’s portfolio.
Alongside the way in which, Signify has partnered with Aspen Doctor Community to develop care episodes, which adjustments how healthcare is paid for and incentivizes physicians to consider the top outcome fairly than every service. As CMS pushes suppliers to embrace value-based funds, episodes of care funds embrace all providers related to the therapy for an sickness or situation fairly than being charged for each take a look at, process, or picture.
“Signify Well being will play a vital function in advancing our well being care providers technique and offers us a platform to speed up our progress in value-based care,” stated CVS Well being President and CEO Karen S. Lynch through launch. “This acquisition will improve our connection to customers within the dwelling and allows suppliers to higher handle affected person wants as we execute our imaginative and prescient to redefine the well being care expertise. As well as, this mix will strengthen our skill to develop and develop new product choices in a multi-payor method.”
The corporate additionally labored with Kids’s Oncology Group to maneuver pediatric most cancers trials into the house, permitting susceptible sufferers to be handled in a extra comfy setting and eradicating hurdles to therapy like transportation and childcare prices. The writing for this transfer into the higher echelon of healthcare firms might have been on the wall when Signify was requested to be on the White Home’s COVID-19 Job Power in 2020, together with CVS Well being, LabCorp, and different main healthcare gamers.
“We fashioned Signify Well being and recruited Kyle and the workforce to construct a strategic innovation platform targeted on leveraging know-how as a catalyst for connecting key well being care stakeholders to drive higher affected person outcomes,” stated Matt Holt, chairman of the board at Signify Well being and president of personal fairness and managing director at New Mountain Capita through releasel. The agency owns 60 p.c of Signify shares. “Along with CVS Well being, Signify is uniquely positioned to proceed to steer the transformation to value-based care. We stay up for the numerous influence this transaction will make on well being look after years to come back.”
