Humana is wasting little time expanding its role as a primary care provider for the elderly. The company’s latest move: Humana will pay between $450 million and $550 million to acquire the first group of senior-focused, value-based care primary care centers that it developed through a joint venture with its private equity firm partner Welsh, Carson, Anderson & Stowe (WCAS).
The payer will use a mix of cash and debt to buy 20 CenterWell senior primary care clinics. In February 2020, Humana and WCAS partnered with plans to launch 67 senior-focused centers by early 2023.
During a recent investors’ meeting, Susan Diamond, Humana’s chief financial officer, said the company is on track to operate about 250 primary care clinics under the CenterWell and Conviva Care Solutions brands by the end of the year. And while Humana states it has driven strong year-over-year performance at its clinics, it still will pursue other mergers and acquisitions to continue to grow its presence in primary care services for older adults.
In May, Humana and WCAS announced a second joint venture to spend $1.2 billion to develop 100 new senior-focused primary care clinics between 2023 and 2025. The company plans to add 30 to 50 clinics per year through 2025, with as many as 15 to 25 of these clinics being added through acquisitions, Diamond says.
Further out, Humana plans to spend $2.5 billion to $3.5 billion between 2026 and 2030 on clinic expansion as the company accelerates its building plans.
What Humana’s Expansion Means to Hospitals
The primary care market just got more competitive.
By steadily ratcheting up investments in serving elderly patients, Humana through its acquisitions will be a stronger player in some primary care markets and through CenterWell’s home health care services.
Service differentiation and value will be key to future growth.
Hospitals have an opportunity to strengthen connections with patients, particularly seniors, if they can successfully expand their ability to deliver primary care services at home.
It may be time to refine tech and workforce strategies.
The ability to provide primary care services remotely and conveniently for patients likely will increase in importance as America’s rapidly growing senior population tries to remain in their homes longer.