Signify Health Bidders Offer Competing Visions of Healthcare’s Future

Providing value is at a premium in inflationary times, but value-based healthcare is always desirable regardless of macroeconomic conditions — which helps explain the bidding war that’s broken out over value-based healthcare solutions platform Signify Health.

Widely-reported news of competing bidders for the Dallas-based healthcare platform, including Amazon, CVS Health and UnitedHealthcare, have been bandied about since early August. All three are on missions to build value-based offerings, and Signify would be a good get given its well-established network and strong second quarter 2022 financials.

On releasing its Q2 2022 earnings in early August, Signify Health CEO Kyle Armbrester said its Caravan Health acquisition in March has brought “strong shared savings performance.”

Armbrester also noted that the company is “seeing increasing interest from healthcare providers in moving forward with their roadmaps for beginning, or expanding, their participation in total cost of care payment programs in partnership with us, including several clients who quickly transitioned from episodes-focused models to total cost of care programs.”

See also: Amazon Doubles Down on Healthcare With Signify Bid

On Sunday (Aug. 21), The Wall Street Journal reported that “people familiar with the matter” confirmed that Amazon is among the bidders in what could end up becoming an $8 billion acquisition, if Signify sells to anyone right now — an outcome that isn’t certain.

The trend is clear as retail, eCommerce and healthcare brands all seek new revenue streams from the telehealth and walk-in clinic businesses that became vital parts of the healthcare system during the pandemic.

According to the study “The Connected Economy: The Trend Toward Digital Healthcare,” a PYMNTS report with research sponsored by CareCredit, “The increase in patients seeking healthcare services is not limited to the digital space. The number of patients seeking traditional in-person healthcare services also increased as COVID-19 cases continue to surge.

“In May 2022, 56% of Americans had an in-person interaction with a healthcare professional, such as a doctor, pharmacist or nurse practitioner, for example — up from 54% in November 2021.”

Learn more: The Connected Economy: The Trend Toward Digital Healthcare

Building a New Healthcare System

Looking at how the Signify acquisition would help each of the marquee players said to be vying for the platform, Amazon’s hand in healthcare was most recently strengthened by its July acquisition of One Medical, a San Francisco-based primary care organization.

“The opportunity to transform health care and improve outcomes by combining One Medical’s human-centered and technology-powered model and exceptional team with Amazon’s customer obsession, history of invention, and willingness to invest in the long-term is so exciting,” One Medical CEO Amir Dan Rubin said when the deal was announced. “There is an immense opportunity to make the health care experience more accessible, affordable, and even enjoyable for patients, providers, and payers.”

Not shy with its pocketbook, CVS Health displayed its buying power with the 2018 acquisition of Aetna for $69 billion. CVS was also reportedly after One Medical, though Amazon won that round.

CVS owns the MinuteClinic walk-in urgent care brand, and the company has said for some time it intends to expand further primary care into other aspects of care delivery, with CEO Karen Lynch saying on a Q2 earnings call in early August, “We can’t be in the primary care without M&A. We’ve been very clear about that.”

Read more: CVS Reportedly Eyeing Signify Health to Expand Into Medical Services

As for UnitedHealthcare, Bloomberg reported that the company has submitted the highest bid, said to be above $30 a share and slightly higher than Amazon’s, according to the same unnamed sources. Final bids for Signify are said to be due by early September.

On Monday (Aug. 22), Fierce Healthcare reported that “UnitedHealth Group’s holdings include the sprawling Optum subsidiary that consists of the data analytics arm Optum Insights and the Optum Health arm, one of the country’s largest employers of physicians.

“The company is expanding its home health services business through acquisitions. In March, UnitedHealth Group announced it would acquire home healthcare provider LHC Group for $170 per share in cash, or about $5.4 billion.”

Healthcare is the new battleground from big box to Big Tech, and Walmart continues to roll out its Walmart Health walk-in clinics. The company recently added five new clinics in Florida, taking its total up to 24 locations across Georgia, Arkansas, Florida and Illinois. Walmart Health acquired a telehealth company to expand into virtual services last year, the company said in a statement.

In May 2021, Walmart acquired telehealth provider MeMD, saying in that announcement that the acquisition would, “over the coming months, allow Walmart Health to provide access to virtual care across the nation including urgent, behavioral and primary care, complementing our in-person Walmart Health centers.

“Our focus on consumer engagement, improved health outcomes and early, equitable access remains the cornerstone of quality health care that can help lower overall health care costs across all populations.”