CVS Health Expands in Home Healthcare by Acquiring Signify Health


CVS Health (NYSE:CVS) revealed a massive $8 billion deal to acquire Signify Health (NYSE:SGFY). According to the final agreement, CVS Health will pay $30.50 in cash for each share of Signify Health, which represents the total transaction value.

Signify Health Acquisition Will Expand CVS Health Healthcare Services

The company claims that Signify Health, a preeminent healthcare platform, will be crucial in developing CVS Health’s healthcare services strategy. In addition, it will give CVS Health a platform to advance its value-based care initiatives. The transaction is anticipated to close for both companies in the first half of 2023.

Shares of CVS Health fell 0.49% after the announcement, while Signify Health stock rose 1.3% by yesterday’s close.

The value-based payment schemes powered and created by Signify Health combine technology, analytics, and networks to improve results and user experiences. Signify Health excels in three areas: value-based care, provider enablement, and health risk assessments.

In addition to a countrywide value-based provider network and more than 10,000 clinicians spread throughout all 50 states, it also has its own analytics and technology platforms. Based on this, Signify Health is enhancing care coordination, patient outcomes, and patient engagement for all parties involved in the health care system.

Relevance of the Agreement

Management claims that both businesses aim to create a seamless experience that enables a more proactive, preventive, and all-encompassing approach to patient care.

Signify Health Network clinicians visit patients at home to assess their clinical and social requirements. For a more integrated, efficient care experience, they then connect patients to the proper follow-up care and community-based resources. The professionals at Signify Health anticipate establishing in-person and virtual connections with approximately 2.5 million distinct members in 2022. They expect to spend 2.5 times as much time with a patient at home as they would in a typical primary care office visit.

Signify Health also emphasized value-based care and population health after acquiring Caravan Health in March 2022. Over 170 providers participating in accountable care organizations (ACOs) catering to Medicare enrollees are now partnered with Caravan.

In a recent statement, Signify Health stated that its ACOs produced gross savings of more than $138 million in 2021. The Caravan company is anticipated to provide services to ACOs representing over 700,000 people in 2023, competing with various standalone platforms.

Following the acquisition, Signify Health will be able to advance with its broad capabilities for enabling primary care, including as readymade analytics, network, and practice optimization solutions, to assist clinicians in converting to value-based compensation and enhance the standard of care. According to CVS Health, this acquisition would improve the company’s relationship with home care consumers and give providers more tools to interact with patients. Additionally, this merger will increase CVS Health’s capacity to grow and create new product lines using a multi-payor strategy.

As stated during its Investor Day in December 2021, CVS Health anticipates the acquisition to be significantly accretive to its earnings and to help it meet its long-term adjusted EPS goals.

CVS Health Invests $10.5M Into Affordable Housing in Cleveland

CVS Health announced on August 25 that it would contribute $10.5 million toward the construction of Cleveland, Ohio, which has 50 supportive housing units for young adults. This action results from the company’s dedication to achieving health equity by tackling local social determinants of health.

On the project, CVS Health will collaborate with Emerald Development and Economic Network Inc. (EDEN), a Cleveland-based distributor of scattered site properties, and CHN Housing Partners, a nonprofit developer of affordable housing.

Plus, through December, the company will make its Project Health mobile events—CVS Health’s free, neighborhood-based health screening program—available to the Cleveland community.

CVS Health Stock Performance

CVS Health stock has performed better than its sector over the past year. In contrast to the industry’s 1% loss, the stock has increased by 13.7%.

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About the author: Stephanie Bedard-Chateauneuf has over four years of experience writing financial content for various websites. Over the years, Stephanie has covered various industries, with a primary focus on consumer stocks, cannabis stocks, tech stocks, and personal finance. This stock lover likes to invest for the long-term. Stephanie has an MBA in finance.