The home-based care business is seeing increased interest and could be ripe for more activity going forward.
Elevance Health is committing to growing its home-based care with its newest acquisition.
The company’s health services subsidiary, Carelon, is planning to purchase value-based home health company CareBridge, allowing Elevance to join its insurer competitors in the home care space.
Elevance CEO Gail Boudreaux characterized CareBridge to investors on a recent earnings call as a “value-based manager of home and community-based services for chronic and complex members that will serve as the foundation for Carelon home health business.”
The deal for the Nashville-based company is reportedly worth $2.7 billion, according to Nashville Business Journal.
Founded in 2019 by Brad Smith, the former director for Medicare and Medication Innovation and co-founder and CEO of Aspire Health, and former senator Bill First, CareBridge operates in 17 states and Washington, D.C., and served over 115,000 patients in 2023. It generates more than $4 billion annually, according to a report by Forbes.
Boudreaux said the acquisition “gives us home-based care and another pillar inside of our growth strategy for Carelon services where we can take significantly more pass-through of the type of medical expense we're managing inside of Carelon.”
In Elevance’s third quarter earnings, Carelon reported total operating revenue of $13.8 billion for a 15% increase year over year, contributing to the insurer’s $1 billion in net income.
Elevance executive vice president and CFO Mark Kaye noted that the company will continue to scale Carelon, adding to its existing services such as behavioral health and pharmacy benefit management.
“Carelon Services is expanding its capabilities to manage a growing proportion of healthcare spending, supporting the long-term growth of the business and by extension, the value it creates for health plan customers,” Boudreaux said.
Home health is an area insurers have targeted in recent years and appears ready for more dealmaking.
Last year, UnitedHealth Group’s subsidiary Optum acquired home health and hospice provider LHC Group for $5.4 billion before agreeing to purchase Amedisys for $3.3 billion, which is pending due to regulatory scrutiny.
Humana, meanwhile, acquired Kindred at Home in 2021 before rebranding the provider as CenterWell Home Health in 2022.
Insurers are primed to offer home health services to their Medicare patients amidst a shift to value-based care.
Jay Asser is the CEO editor for HealthLeaders.
KEY TAKEAWAYS
During its third quarter earnings call, Elevance Health revealed that its subsidiary Carelon intends to purchase home health company CareBridge.
The acquisition will drive Carelon’s home health business, CEO Gail Boudreaux said, as Elevance follows insurers like Humana and UnitedHealth Group into the space.
Carelon will add to its portfolio after reporting total operating revenue of $13.8 billion in the third quarter, representing 15% growth year over year.