CVS to Acquire Company That Makes House Calls

Carolyn Crist

September 06, 2022

CVS Health announced Monday that it would acquire Signify Health, which has a network of doctors who make home visits.

The $8 billion deal, if approved by shareholders and regulators, would give CVS a new way to reach customers at home through a network of more than 10,000 doctors, nurse practitioners, and physician assistants across all 50 states.

"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," Karen Lynch, president and CEO of CVS Health, said in the statement.

"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," she said. "In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach."

Signify Health uses home-based visits to identify a patient's clinical and social needs and then connects them to other health care services or community-based resources that can help.

Retail pharmacies have been looking for new ways to create stronger ties to their customers, especially as more people move online to buy items rather than go into stores, according to The New York Times . By acquiring Signify Health, CVS would connect with 2.5 million patients who need in-home health care across the U.S., including those on Medicare and in underserved communities.

"Their interest is to take over the home," Eric Topol, MD, a cardiologist and director of the Scripps Research Translational Institute in San Diego, told the newspaper. (Topol is also the editor-in-chief of Medscape, WebMD's sister website for medical professionals.)

When health care is provided at home, rather than at the hospital, it lightens the load on insurance companies, he said, including Aetna, an insurance business that CVS owns. Signify Health contracts with insurance providers, including Aetna.

"If you're looking at it from Aetna's standpoint, this is a way to save big, big expenditures for their people they cover," Topol said.

CVS has about 40,000 doctors, pharmacists, nurses, and nurse practitioners, as well as 1,100 MinuteClinic locations that offer appointments for physicals and vaccinations, the newspaper reported.

The retail chain has also been making plans to close stores as it explores other ways to reach patients, including in the home. The company announced last year that it would close about 900 stores in the next 3 years.

CVS and Signify said they expect the deal to close in the first half of 2023.

"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," Kyle Armbrester, CEO of Signify Health, said in the statement.

CVS has gotten new health care services since 2006, when it acquired Caremark Rx, a pharmacy benefits manager. The company also acquired more than 1,000 of Target's pharmacies in 2015 and Aetna in 2018, the newspaper reported.

Since 2020, the COVID-19 pandemic has changed the way Americans seek medical care and how companies provide it, the Times noted. Patients are looking for new alternatives to traditional hospital care, including virtual and clinic options. For instance, retail companies such as CVS, Walgreens, and Walmart played a role in the Biden administration's coronavirus testing and vaccination programs.

Other retail companies are making major moves in the health care services industry as well. Amazon announced in July that it would acquire One Medical, a chain of primary care clinics. Walgreens has announced several deals, including the acquisition of CareCentrix, a company that provides services at home.

UnitedHealth also agreed this year to buy LHC Group, one of the country's largest home health companies. Last year, Humana said it would take over Kindred at Home, another home health provider.

"The house call is having what I'd characterize as a renaissance," Lynch told The Wall Street Journal.  "This deal enhances the connection to consumers in the home."

Sources

CVS Health: "CVS Health to Acquire Signify Health."

The New York Times: "CVS Makes $8 Billion Bet on the Return of the House Call."

The Wall Street Journal: "CVS Agrees to Buy Home-Healthcare Company Signify for $8 Billion."

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