Humana's CenterWell Senior Primary Care and Welsh, Carson, Anderson & Stowe Announce Second Joint Venture to Develop and Operate Value-Based Primary Care Clinics for Medicare Patients
Humana Inc.'s (NYSE: HUM) CenterWell Senior Primary Care and Welsh, Carson, Anderson & Stowe ("WCAS") have established a second joint venture ("JV") to further expand access to value-based primary care clinics for Medicare patients. The new JV will deploy up to $1.2 billion of committed capital to develop approximately 100 new senior-focused, payer-agnostic primary care clinics between 2023 and 2025 and operate them to profitability. This JV between Humana's CenterWell Senior Primary Care and WCAS follows an earlier JV that is currently deploying up to $800 million of capital to open 67 clinics by early 2023 and support their ongoing operations.
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WCAS, a healthcare and technology-focused investment firm, will have majority ownership of the JV, while Humana will own a minority stake. All de novo clinics developed through the Humana-WCAS joint ventures will be managed and operated under Humana's CenterWell Senior Primary Care brand.
As the nation's largest provider of senior-focused primary care, CenterWell Senior Primary Care is actively scaling its platform through a combination of de novo expansion and inorganic growth. As of March 31, 2022, Humana's Primary Care Organization ("PCO") operates a total of 214 senior-focused primary care clinics, including 37 under the current joint venture with WCAS and 177 other wholly owned centers. Together, these 214 clinics - operating under the CenterWell Senior Primary Care and Conviva Care Solutions brands - serve approximately 180,000 patients in Medicare value-based arrangements, while also supporting 58,000 patients under Independent Practice Association (IPA) arrangements through Conviva Care Solutions. By the end of 2022, Humana expects to serve Medicare patients in approximately 250 CenterWell and Conviva clinics, and intends to add 30 to 50 additional CenterWell clinics per year through 2025.
"We are excited to grow our partnership with Humana to improve access to senior-focused, value-based primary care across the United States," said David Caluori, General Partner at WCAS. "We look forward to continuing our work alongside the CenterWell team to deploy their care model at scale."
"Physicians and patients alike are coming to recognize the many advantages of our unique, senior-focused primary care model," said Reneé Buckingham, President of Humana's Primary Care Organization which operates both CenterWell Senior Primary Care and Conviva Care Centers. "Doctors and nurses spending more time with patients, paying greater attention to both the physical and mental aspects of health, and following a team-based approach all allow for personalized, value-based care that helps improve lives. Early success has led to increased interest in our payer-agnostic model, and under this new joint venture, we look forward to significantly expanding our geographic footprint and serving even more patients in more communities around the country."
Under the new JV agreement, CenterWell Senior Primary Care will receive a management fee, including performance-based incentives, for the management of all joint venture clinics. In addition, the agreement includes a series of put and call options through which Humana may acquire WCAS's interest in the joint venture beginning in 2028 or five years after the opening of each cohort of clinics, and through which WCAS may require Humana to purchase its interest in the joint venture beginning in 2030 or seven years after the opening of each cohort of clinics.
The transaction is expected to have an immaterial impact to Humana's earnings in 2022.
At CenterWell, part of Humana Inc., we create care experiences that put patients at the center. The result is healthcare that provides ease, comprehensiveness and, most of all, a personal approach. Our primary care, pharmacy, and home health services go beyond traditional clinical settings and outcomes, working with patients and their care teams to close gaps and take their whole health into account.
Because when care is made relevant and accessible, patients can lead happier and healthier lives.
The first services to adopt the CenterWell name were Humana's senior-focused primary care centers. The experienced care teams at CenterWell Senior Primary Care provide comprehensive support services to fully understand the needs of their patients and improve health outcomes.
The Home Health division of Humana-owned Kindred at Home is in the process of transitioning to the CenterWell brand in 2022 - becoming CenterWell Home Health. Also in 2022, Humana's pharmacy and specialty pharmacy businesses will take on the CenterWell name, becoming CenterWell Pharmacy and CenterWell Specialty Pharmacy.
In recent years, Humana has significantly expanded its healthcare services capabilities to better serve its medical members and to significantly strengthen its payer-agnostic care offerings. These services help deliver on the promise of better quality and health outcomes, lower costs and a simpler, more personalized experience for the people they touch.
The CenterWell logo features a blossom with three petals symbolizing physical, emotional and social wellness - important aspects of whole-person health that CenterWell care services address.
Humana Inc. is committed to helping our millions of medical and specialty members achieve their best health. Our successful history in care delivery and health plan administration is helping us create a new kind of integrated care with the power to improve health and well-being and lower costs. Our efforts are leading to a better quality of life for people with Medicare, families, individuals, military service personnel, and communities at large.
To accomplish that, we support physicians and other health care professionals as they work to deliver the right care in the right place for their patients, our members. Our range of clinical capabilities, resources and tools - such as in-home care, behavioral health, pharmacy services, data analytics and wellness solutions - combine to produce a simplified experience with the goal of making health care easier to navigate and more effective.
More information regarding Humana is available to investors via the Investor Relations page of the company's website at humana.com, including copies of:
About Welsh, Carson, Anderson & Stowe
WCAS is a leading U.S. private equity firm focused on the healthcare and technology industries. Since its founding in 1979, the firm's strategy has been to partner with outstanding management teams and build value for its investors through a combination of operational improvements, growth initiatives, and strategic acquisitions. The firm has raised and managed funds totaling over $30 billion of committed capital.
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