CVS Health Purchase of Signify Health Signals Change in Home Health Care

The organization's recent acquisition will expand its reach in coordinating outpatient care.

CVS Health's $8 billion acquisition of home health care provider Signify Health reflects the industry's renewed emphasis on home health, which had long been considered outdated.

With innovations such as telehealth and increased flexibility for providers, home health now presents an opportunity for organizations to expand their reach, as well as the services they provide.

Using the CVS Health acquisition as an example, the American Hospital Association examined different ways the organization's reach will expand.

• The acquisition gives CVS access to 10,000 physicians and clinicians, adding on to the 40,000 it currently employs through in its 1,100 MinuteClinic locations. The providers serve all 50 states, enabling CVS to coordinate outpatient care for millions of people.
• With the organization's commitment to reducing cost of care for insurers like Aetna, which it also owns, the acquisition also gives it control of Signify Health's Caravan subsidiary. Signify Health acquired Caravan in March, which helps health systems and clinicians "operate successfully in value-based care arrangements."
• CVS now has a competitive edge with Medicare Advantage carriers UnitedHealth Group and Humana, both of which have established themselves in the health risk-assessment market.
• Signify Health has a goal to be in 2.5 million homes in 2022, and with the acquisition, CVS will now have direct contact with customers beyond its retail locations.

The AHA noted that CVS had also had plans for a major primary care merger or acquisition, which hasn't happened yet, but still appears to be a possibility.

Investors shouldn't read too deeply into the organization's decision to pursue a home health provider rather than a primary care service provider, according to Shawn Guertin, chief financial officer of CVS Health.

The company's primary objective, he said, it to find the right asset, with the right scale, technology, and team.