Signify Health Announces It’s Acquiring Caravan Health
A business combination announced on Thursday, February 10 signaled the acceleration of the value-based healthcare phenomenon, as executives at the Dallas-based Signify Health, described on its website as “a leading healthcare platform that leverages advanced analytics, technology, and nationwide healthcare provider networks to create and power value-based payment programs,” announced that their company was acquiring the Kansas City, Missouri-based Caravan Health, described on its website as having been “founded to develop better solutions for community health systems,” and having helped to guide “more than 300 independent health systems and 26,000 clinicians to achieve meaningful results through value-based care.”
According to a press release posted to Signify Health’s website on Thursday morning, “Signify Health, Inc. (NYSE: SGFY), a leading value-based healthcare platform that leverages advanced analytics, technology and nationwide healthcare provider networks, today announced it has signed an agreement to acquire Caravan Health, a leader in enabling accountable care organizations (ACOs) to excel in population health management and value-based payment programs, for an initial purchase price of approximately $250 million in a combination of cash and Signify Health common stock. The transaction also includes contingent additional payments of up to $50 million based on the future performance of Caravan. Caravan Health will join Signify Health in supporting a wide spectrum of advanced payment models, enabling providers to assume various levels of risk and collaborate in ways that support their goals to improve health outcomes while lowering costs across the care continuum.”
Further, the press release stated, “This combination unites two leaders in value-based payment models covering a broad range of risk-based and shared savings models, from advanced primary care payment to specialty care bundles to total cost of care contracts. Caravan Health brings key technology, insights, and transformation services to community hospitals, physician practices and clinics looking to succeed in accountable care and other commercial risk arrangements. Signify Health brings technology, analytics, and management expertise in episodes of care and bundled payments. Together, the companies will be supporting approximately $10 billion in total medical spend under management.”
And, it went on, “Upon closing, Caravan Health and Signify Health will have one of the largest national networks of providers engaged in risk-based payment models. Beyond Signify’s current network of over 3,000 physician practices and facilities contracted in value-based arrangements, Caravan adds more than 200 health systems and 100 Federally Qualified Health Centers with more than 10,000 primary care providers that collectively manage over 500,000 patients, most of whom are medically underserved and struggle to access care. Signify is well positioned to address these persistent access issues by assisting these providers, extending their capacity to engage patients in the home and virtually through Signify Health’s national mobile network of approximately 10,000 credentialed physicians and nurse practitioners, and over 600 engagement, clinical, and social care coordinators. In conjunction with Caravan Health’s proprietary software, Signify’s mobile network can be aimed at helping the patients that need it most, extending the resources of often-stretched local care teams, and giving patients the care they need, when and where they need it. The companies also will focus on leveraging Signify Health’s deep payor relationships to increase provider participation in, and access to, commercial value-based care programs. Combining Signify Health’s and Caravan Health’s value-based offerings increases the percentage of patients in a provider’s panel that are covered by value-based arrangements, thereby making them more attractive and helping to drive care redesign.”
“A strategic focus for Signify Health has been driving more participation and success in value-based payment arrangements in alignment with our commercial payor clients. This focus also supports critical imperatives from the Centers for Medicare & Medicaid Services (CMS) to improve health equity and have everyone in Medicare fee-for-service aligned to an accountable relationship by 2030,” said Kyle Armbrester, CEO of Signify Health, said in a statement carried in the press release. “We are thrilled to welcome Caravan Health’s team as we build the infrastructure and payment models that are needed to achieve patient-centric, holistic care and better outcomes for everyone, especially the underserved.”
And Lynn Barr, founder and chairwoman of Caravan Health, said in a statement contained in the press release, that “This is an exciting opportunity to leverage the combined technology, tools and expertise of Caravan and Signify to all move forward toward better patient care while helping providers achieve financial sustainability. We share with Signify Health a deep commitment to doing everything possible to help those we serve live their best life and look forward to accelerating our collective mission to create a healthcare system that works better for all of us.” Upon closing, Ms. Barr will become chief Innovation officer of Signify Health and Tim Gronniger, CEO of Caravan Health, will become EVP, accountable care and CEO of Caravan Health,’ the press release stated.
Caravan Health has been very active in organizing ACOs; indeed, as Senior Editor David Raths noted in a Feb. 4 report, “Caravan Health is expanding its footprint in the Medicare Shared Savings Program by adding 25 new health systems and four existing ACOs into its collaborative ACO model. Collaborative ACOs combine providers with anywhere from 500 to 15,000 attributed Medicare lives into a single ACO, which Caravan says mitigates risk and ensures reliable results. Caravan Health says it holds its ACO members accountable using technology and population health methodologies that have helped health systems and physicians who care for underserved populations save Medicare $476 million and earn more than $235 million in total shared savings. The Kansas City-based company manages six ACOs and more than 600,000 attributed Medicare lives, with its largest collaborative managing more than 260,000 lives. In 2019 and 2020, 100 percent of its model ACO participants received shared savings and are projected to do the same in 2021, the company said. Caravan Health’s has guided 44 health systems into downside risk this year in Medicare’s Pathways to Success Enhanced Track and earn up to 75 percent of shared savings with no fear of losses.”
“We provide our ACO partners with coaching, accountability tools, and advanced clinical workflows to close gaps in care, track quality, and alleviate physician burnout. We do everything we can to support primary care practices and system transformation so ACO partners can focus on providing the best quality care, said Caravan CEO Tim Gronniger in a statement. Caravan Health also helps health systems succeed by sharing the potential downside of value-based care. “This assures health care providers they will get their piece of shared savings, not the worry of potentially writing a check for ACO performance losses,” added Gronniger.
Two of Caravan’s new ACO partners, Summit Healthcare of Arizona and Holy Name Medical Center of New Jersey, recently joined one of Caravan Health’s six collaborative ACOs. “As a relatively small health system, we couldn’t have participated without joining with other providers,” said Summit HealthCare CEO Shawn Morrow, in a statement. “Caravan Health enables us to maintain our autonomy and manage governance at the local level while being part of a much larger ACO, increasing our chances of success in value-based health care.”
“Caravan Health is helping us reach quality goals, reduce costs, and track patient care with easy-to-access reports. With its proven ACO management methodology and population health analytics software, we’re looking to improve patient outcomes and keep our Medicare population healthier,” said Randy Tartacoff, M.D., of Holy Name Medical Center in a statement.
In 2021, Caravan expanded its services to help its ACO partners maximize their use of the 340B drug pricing program. More than 90 percent of Caravan-supported providers are recognized as covered entities. Caravan’s ACO and 340B experts use value-based care contract data to give providers more insight into their referral prescriptions and contract pharmacy use, improve workflows, and more than double their 340B discounts. Substantial increases in savings help safety-net providers move into risk and expand primary care services to better support the communities they serve, the company said.
MobileHealthNews’s Laura Lovett wrote in a report on Thursday afternoon that “Signify Health went public in February 2021. However, since coming onto the public market, the stock has taken a tumble. Share prices have dropped nearly 50 percent since the company debuted on the New York Stock Exchange. Caravan isn't Signify Health's first acquisition. In 2020, it purchased blockchain company PatientBlox, which helps facilitate contracts and payments in healthcare,” Lovett wrote.
On Thursday evening, the Salt Lake City-based Accountable Care Learning Collaborative (ACLC) tweeted its approval of the deal, stating, “A big day in #ValueBasedCare! Congratulations to @signifyhealth and @CaravanHealth. This combined company will create one of the largest networks of at-risk providers, improving patient outcomes while lowering costs across the care continuum.”
After the markets had closed on Thursday evening, the stock analysis website “Tickeron” reported of Signify Health (SGFY), that “Current price $13.83 crossed the resistance line at $13.41 and is trading between $19.78 support and $13.41 resistance lines. Throughout the month of 01/09/22 - 02/09/22, the price experienced a +5% Uptrend. During the week of 02/02/22 - 02/09/22, the stock enjoyed a +8% Uptrend growth.”
