Signify Health’s $300M Acquisition of Caravan Health Could Accelerate Value-Based Care, But Not All Healthcare Providers Agree
The news: Value Based Care (VBC) Giant Signify health acquires the Responsible Care Organizations (ACO) network Health Caravan to accelerate VBC payment models in the United States. Signify acquires Caravan for $250 millionwith up to an additional $50 million based on future performance.
Why is this important: Together, Signify and Caravan will have one of the largest VBC footprints in the United States.
- Signify’s existing network includes 3,000 VBC-contracted medical practices and can now add Caravan’s network of over 200 health systems, 100 Federally Registered Health Centers (FQHCs), and over 10,000 primary care practices .
- Their combined footprint will allow their network providers to better coordinate VBC, which could help Signify attract more paying customers.
- Cloud-based from Signify Platform will have access to more provider and healthcare data that will improve how its analytics identify patient health risks and other BCV factors.
How digital health can enable VBC: VBC models depend on actionable quality metrics that can accurately assess and analyze healthcare costs, quality, and outcomes.
- For example, a health technology company Apollo Med uses AI technology to automate administrative functions and identify VBC key performance indicators to help providers deliver higher quality care.
- In another example, To clarify Health The AI-powered cloud analytics platform optimizes VBC contracts between vendors and payers by analyzing metrics such as vendor performance and real-time population health insights.
Digital health solutions such as virtual care and RPM can help fuel preventative health care and enable providers to deliver better health outcomes.
- For example, digital health startups like Oak Street Health and Cityblock Health implement community-based preventive care models that also operate primarily in values-based environments.
The challenge: Many suppliers are still reluctant to take the financial risk of VBC. Additionally, as the role of private equity in healthcare expands, VBC may take a step back.
- Many healthcare executives (about 1 in 5) said the threat of financial loss was the biggest barrier preventing them from deploying value-based models of care, according to a 2021 population health report report by Numerof & Associates.
- PE’s investment in healthcare has been booming— and often the goal of PE is to generate income, not necessarily to provide better quality care.