Chief Healthcare Executive
Ron Southwick
September 7, 2022
Site editor:
Joaquim Cardoso MSc.
health transformation — journal
September 11, 2022
As CVS Health plans to buy Signify Health in an $8 billion deal, analysts say it’s another sign that healthcare continues to move outside the hospital and traditional settings.
CVS Health and Signify announced the deal this week.
If the deal wins the approval of regulators, CVS acquires Signify’s network of 10,000 doctors that focus on delivering care to patients at home.
If the deal wins the approval of regulators, CVS acquires Signify’s network of 10,000 doctors that focus on delivering care to patients at home.
Paddy Padmanabhan, CEO of Damo Consulting, described it as “a big deal” in an interview with Chief Healthcare Executive, both due to the size of the transaction and as an indicator of the changing healthcare landscape.
“What it seems to imply is that home health is now a hot space,” Padmanabhan said. “It lines up overall with the macro trend of care moving from hospitals to the home.”
“What it seems to imply is that home health is now a hot space,” …“It lines up overall with the macro trend of care moving from hospitals to the home.”
“It points to the value being attached to companies that can build technology platforms to address care needs in a more significant way,” he said.
“It points to the value being attached to companies that can build technology platforms to address care needs in a more significant way,” he said.
Assuming federal regulators approve the acquisition, CVS and Signify said they expect to complete the deal in the first half of 2023.
Kyle Armbrester, CEO of Signify Health, will continue to lead Signify after the deal is complete, the companies said.
Analysts said the deal gives CVS a stake in primary care as the company continues its evolution from a large chain of pharmacies. CVS acquired Aetna, the insurance company, in 2018.
CVS Health President and CEO Karen S. Lynch said the acquisition of Signify represents a key piece in its healthcare strategy.
Analysts said the deal gives CVS a stake in primary care as the company continues its evolution from a large chain of pharmacies. CVS acquired Aetna, the insurance company, in 2018.
“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,” Lynch said in a statement.
In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”
“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,” …
In addition, this combination will strengthen our ability to expand and develop new product offerings in a multi-payor approach.”
‘Competitive threat’
Hospital and health system leaders must recognize they are facing greater competition for patients and will have to think more strategically.
“‘I would be seeing this as a competitive threat on the horizon,” Padmanabhan said.
“This is your classic industry disruption that is unfolding in front of us. These industry disruptions happen at the edges and suddenly they’re in their backyards.”
Hospital and health system leaders must recognize they are facing greater competition for patients and will have to think more strategically.
“This is your classic industry disruption that is unfolding in front of us. These industry disruptions happen at the edges and suddenly they’re in their backyards.”
The CVS deal to buy Signify is the latest move into primary care from an emerging rival.
In July, Amazon announced a $3.9 billion deal to buy One Medical, a primary care organization that offers members in-person care and virtual care around the clock.
In July, Amazon announced a $3.9 billion deal to buy One Medical, a primary care organization that offers members in-person care and virtual care around the clock.
Hospitals are secure in the acute care space and in more specialized forms of care, Padmanabhan said. But health systems are facing new battles in primary care.
“Primary care is clearly in play,” Padmanabhan said. “The competitive forces in primary care are very intense.”
Hospitals are secure in the acute care space and in more specialized forms of care, …But health systems are facing new battles in primary care.
“Primary care is clearly in play,”… “The competitive forces in primary care are very intense.”
Now, there’s growing interest in home healthcare, he noted.
“Home health is the next competitive front,” Padmanabhan said. “Before you know it, you’ve got the whole industry now surrounded by competitors coming into these niches, home health, primary care.”
“Home health is the next competitive front,” … “Before you know it, you’ve got the whole industry now surrounded by competitors coming into these niches, home health, primary care.”
Future ‘is in the home’
As technology advances to monitor patients at home, more Americans say they want to receive healthcare, or simply grow older, in their own homes.
“The future of healthcare is in the home,” Padmanabhan said. Seniors “want to be at home. The technology is available to allow you to age at home. The technology is available now to be cared for,” he said.
As technology advances to monitor patients at home, more Americans say they want to receive healthcare, or simply grow older, in their own homes.
“There’s certain things you will have to go into a hospital,” Padmanabhan said.
“The portfolio of services for which you need to go into a facility is going to shrink as more services can be performed in the home, or through a remote model of some kind.”
“The portfolio of services for which you need to go into a facility is going to shrink as more services can be performed in the home, or through a remote model of some kind.”
Dr. Eric Topol, a professor of molecular medicine at Scripps Research in San Diego, said CVS’ ambition “is to take over the home,” The New York Times reported.
He noted that reducing healthcare costs aligns with the interests of insurers, including Aetna, which CVS owns.
Some hospitals have been expanding their services to patients in the home.
Dr. Eric Topol, a professor of molecular medicine at Scripps Research in San Diego, said CVS’ ambition “is to take over the home,” …
He noted that reducing healthcare costs aligns with the interests of insurers, including Aetna, which CVS owns.
Some hospitals have been expanding their services to patients in the home.
With the COVID-19 pandemic, more hospitals have been offering acute care for patients in their homes.
As of Sept. 2, 114 health systems and 252 hospitals in 37 states are offering some acute care services at home, according to the Centers for Medicare & Medicaid Services.
Hospitals are also using digital tools to offer remote patient monitoring at home to help manage patients with chronic conditions.
“They are actively investing in these remote care models,” Padmanabhan said.
… 114 health systems and 252 hospitals in 37 states are offering some acute care services at home, …
Hospitals are also using digital tools to offer remote patient monitoring at home to help manage patients with chronic conditions.
Need for strategic thinking
As there is growing competition for home-based services, hospitals are going to have to think strategically.
At the American Hospital Association Leadership Summit, health system leaders said they see more health care being done outside of the four walls of the hospital.
Hospitals must focus on making all aspects of healthcare more accessible to consumers, from scheduling to billing, executives said.
As there is growing competition for home-based services, hospitals are going to have to think strategically. … leaders said they see more health care being done outside of the four walls of the hospital.
Hospitals must focus on making all aspects of healthcare more accessible to consumers, from scheduling to billing …
With growing competition from CVS and Amazon, health systems are likely going to respond by expanding their home-based services, Padmanabhan said.
With growing competition from CVS and Amazon, health systems are likely going to respond by expanding their home-based services, Padmanabhan said.
“If I was a big health system, I would be thinking about this in terms of the competitive threat and thinking about what I could be doing to retain my position and patients,” Padmanabhan said.
“If I was a big health system, I would be thinking about this in terms of the competitive threat and thinking about what I could be doing to retain my position and patients,” …
Leaders of hospital systems of all sizes need to be thinking about how to respond to more rivals for healthcare, Padmanabhan said.
A hospital that specializes in heart and lung procedures may well want to double down on that competitive advantage, while partnering with other companies that can offer more digitally-enabled home services, he said.
However they do it, hospitals and health systems are going to have to deploy technology that enables them to deliver healthcare in different ways, he said.
A hospital that specializes in heart and lung procedures may well want to double down on that competitive advantage, while partnering with other companies that can offer more digitally-enabled home services, …
However they do it, hospitals and health systems are going to have to deploy technology that enables them to deliver healthcare in different ways,…
‘Shortage of labor’
As for the CVS-Signify deal, Padmanabhan said he is uncertain if the Federal Trade Commission will have any problems with the merger. “It’s too early to tell. It is a large transaction,” Padmanabhan said.
However, he added he didn’t expect any regulatory hurdles for Amazon’s planned purchase of One Medical, but that deal is getting some scrutiny.
The FTC is investigating Amazon’s acquisition of One Medical, CBS News reported, citing a filing with regulators.
President Biden’s administration has exercised more scrutiny with some healthcare mergers, including hospital consolidations.
The FTC has opposed several hospital deals recently, and regulators have been sharply critical of deals involving providers in the same market, saying they could lead to higher prices and reduced services.
The FTC has opposed several hospital deals recently, and regulators have been sharply critical of deals involving providers in the same market, saying they could lead to higher prices and reduced services.
Nonetheless, the CVS-Signify deal reflects not only the changing nature of healthcare but how the industry is adapting to a dearth of physicians and other healthcare professionals.
“I think the one thing we should be keeping front and center as we analyze these deals is the acute shortage of labor in the healthcare sector today and how that is driving the access to services and the quality of services,” Padmanabhan said.
Nonetheless, the CVS-Signify deal reflects not only the changing nature of healthcare but how the industry is adapting to a dearth of physicians and other healthcare professionals.
Companies that can help expand healthcare services with less labor are going to be valuable, Padmanabhan said.
“The pool of capital is shrinking,” he said. “The demand for services is increasing. We are heading to a crisis in that sense.”
“The pool of capital is shrinking,” … “The demand for services is increasing. We are heading to a crisis in that sense.”
Originally published at https://www.chiefhealthcareexecutive.com on September 7, 2022.
Names mentioned:
CVS Health President and CEO Karen S. Lynch
Kyle Armbrester, CEO of Signify Health,
Paddy Padmanabhan, CEO of Damo Consulting
Dr. Eric Topol, a professor of molecular medicine at Scripps Research in San Diego
