The news: Walgreens Boots Alliance is buying the remaining 45% share of CareCentrix that it doesn’t already own for approximately $392 million.
- CareCentrix manages care for more than 19 million members through more than 7,400 provider locations.
- Its services include home nursing, durable medical equipment, home infusion, and in-home palliative care.
How we got here: CVS Health, Amazon, Walgreens, and UnitedHealth Group are competing to build out national networks of primary care clinics, telehealth services—and now, home health companies.
- Walgreens got out in front of its rivals last October with its first CareCentrix investment, paying $330 million for 55% of the company.
- UnitedHealth, which already has the largest physician network in the US, bought LHC Group—one of the largest US home healthcare companies—in March 2022 for $5.4 billion.
- Amazon scooped up One Medical, a primary care network, in July for $3.9 billion, then announced it will close Amazon Care by the end of the year.
- And in August, a bidding war broke out among CVS, Amazon, and UnitedHealth for Signify Health, a home health assessment company. CVS won with an $8 billion offer.
What’s next? We predict the buying frenzy won’t abate in 2022, because there’s so much more to buy. Consider this:
Senior care companies are now hot commodities. Medicare Advantage programs are raking in billions for insurers like UnitedHealth, CVS’ Aetna, and Humana.
- Brookdale Senior Living, the largest US senior living company, is “exploring strategic options” as of October 7.
- Senior care provider Cano Health is reportedly negotiating with CVS, per Bloomberg, although Humana has first right of refusal.
Health insurance is another piece of the puzzle.
- CVS already owns Aetna, a major health insurer.
- Walmart launched Walmart Insurance Services in October 2020 and partnered with UnitedHealth in September 2022 to offer preventive care for seniors and Medicare members.
Amazon now owns a pharmacy and a national physician network. Acquiring an insurtech like Oscar or Clover Health would benefit its Prime Rx offerings—and its One Medical arm.
Stay tuned: Anything is possible, especially when the market caps of these players range between $28 billion (Walgreens) and $1 trillion (Amazon). It doesn’t matter how much money a potential target is losing, so long as the buyer sees some revenue upside down the road.