The Acquisition of Signify Health Will Help CVS Health Expand Into Home Healthcare.

CVS Stock Signify Health


The massive $8 billion deal for CVS Health (NYSE:CVS) to acquire Signify Health (NYSE:SGFY) was announced recently. The total transaction value of CVS Health’s acquisition of Signify Health is $30.50 per share in cash, as stated in the definitive agreement.

CVS Health (NYSE:CVS) claims that Signify Health, as a market leader in the healthcare platform space, will be instrumental in driving the company’s healthcare services strategy forward. CVS Health will be able to advance more quickly in the direction of value-based care with the help of this platform. It is anticipated that both parties will finalize the deal in the first half of 2023.

Shares of CVS Health (NYSE:CVS) Health fell 0.49 percent after the news was released, while shares of Signify Health rose 1.3 percent by the previous day’s close.

Read Further into Signify Health

Better patient outcomes and experiences result from Signify Health’s technology, analytics, and network integration. Health Risk Assessments, Value-Based Care, and Provider Enablement are three areas where Signify Health excels.

Its nationwide value-based provider network, in-house analytics, and technology enable it to connect patients with over 10,000 doctors in all 50 states. Signify Health uses these to enhance participation, outcomes, and care coordination for all parties involved in the healthcare delivery process.

Considerable Importance of the Agreement

Management at both organizations has stated an interest in creating a unified environment conducive to a more preventative, holistic, and proactive method of treating patients.

The clinicians in the Signify Health network conduct home visits to assess medical and social requirements. After that, they link them up with the right kind of aftercare and community resources to ensure they get the best possible treatment. By 2022, the clinicians at Signify Health hope to have made in-home, digital, and personal connections with over 2.5 million unique members. They anticipate spending 2.5 times as much time with a patient in the house as is typical during a primary care office visit.

Furthermore, Signify Health’s March 2022 acquisition of Caravan Health widened the company’s focus on value-based care and population health. The caravan now acts as a partner to over 170 physicians participating in accountable care organizations (ACOs) servicing Medicare patients.

Signify Health has stated that its ACOs produced more than $138 million in gross savings in 2021. In 2023, the Caravan company is planning to service ACOs representing over 700,000 individuals — rivaling numerous solo platforms.

After being acquired by CVS Health (NYSE:CVS), Signify Health will be able to further its comprehensive primary care enablement capabilities, such as its turnkey analytics, network, and practice improvement solutions, all of which aid physicians in their transition to value-based reimbursement and boost the quality of care they offer their patients. CVS Health thinks this transaction will increase CVS Health’s interaction with consumers in-home care and enable clinicians to treat patients better. CVS Health’s multi-payer expansion and new product development capabilities will be enhanced by this merger.

Relevance From A Financial Perspective

CVS Health (NYSE:CVS) anticipates that the transaction will positively impact its profitability and reach its long-term adjusted EPS goals by the end of 2021, as presented at its Investor Day.

CVS Health (NYSE:CVS) has had better results than its competitors over the past year. The industry has dropped by 1%, but the stock has risen by 13.7%.

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About the author: I'm a financial journalist with more than 1.5 years of experience. I have worked for different financial companies and covered stocks listed on ASX, NYSE, NASDAQ, etc. I have a degree in marketing from Bahria University Islamabad Campus (BUIC), Pakistan.