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Humana, Private Equity Firm Form Value-Based Joint Venture

Analysis  |  By Jack O'Brien  
   February 03, 2020

The Louisville-based insurer announced the joint venture with Welsh, Carson, Anderson & Stowe Monday morning.

Humana Inc. announced the formation of a value-based primary care joint venture (JV) with Welsh, Carson, Anderson & Stowe (WCAS), a New York-based private equity firm, Monday morning.

The JV will focus on primary care for seniors and will be overseen by Humana's subsidiary, Partners in Primary Care, according to a press release.

WCAS is committing $600 million as an initial investment to the project and will own a majority stake in the company.

David Caluori, a general partner at the firm, said the move was prompted by the "significant unmet need" for value-based primary care options for seniors.

"Through this new joint venture, Partners in Primary Care is now well resourced to accelerate the deployment of its proven care model in areas across the country that need it most," Caluori said in a statement.

The Louisville-based insurer, which will still own a minority stake in the company, made the JV public two days before the release of its year-end earnings report and does not expect the transaction to have a material impact on its earnings for 2020.

Related: Humana Hires Away Chief Data Officer From Federal Agency

Humana's JV is the latest example of how healthcare organizations have started to gravitate towards business opportunities in the primary care space in recent months.

In November, Geisinger Health announced that it will make its medical school tuition-free for students pursuing a career in primary care.

In an interview with HealthLeaders, Geisinger CEO Jaewon Ryu, MD, JD, said that the organization announced the new policy to anticipate the increased burden related to aging baby boomers who require care options for chronic conditions.

"We see 10,000 people aging into 65 every day in this country," Ryu said. "As people age … they tend to be sicker. And so, there's an awful lot of chronic disease. And I think that the needs are profound in our community."

Related: Geisinger's Long-Term Investment Plan to Eradicate Med School Debt, Strengthen Primary Care

Beyond payers and providers increasing their focus on primary care options, one healthcare company made its debut on Wall Street last week with a mission to improve the delivery of primary care services.

On Friday, One Medical, a San Francisco-based primary care startup, made its debut on the Nasdaq.

The company currently services around 400,000 members across nine markets, with plans to expand to three additional markets this year.

Additionally, One Medical generated $245 million in gross proceeds from its initial public offering.

Related: Primary Care Startup One Medical Goes Public

Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.

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