Walgreens Boots Alliance acquires CareCentrix
Walgreens Boots Alliance has completed its previously announced majority share acquisition of CareCentrix, an independent home-centered platform that coordinates care to the home for health plans, patients and providers.
The majority investment in CareCentrix accelerates Walgreens Health’s capabilities in delivering health care across a spectrum of settings including primary care, specialty pharmacy care, post-acute care and home care, the company said.
By bringing together Walgreens trusted health services and community presence with CareCentrix’s technology-enabled, care-at-home solutions, the partnership better addresses the needs of people with complex or chronic conditions as they transition out of the hospital, the company said.
CareCentrix’s advanced data analytics capabilities enable highly personalized care plans to help people transition to the right site of care, prioritizing care in the home when appropriate. This approach supports both care quality and value by reducing hospital readmissions and improving patient satisfaction and outcomes.
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“We created Walgreens Health to reimagine local health care and well-being for all. This partnership advances our ability to address the needs of people across care settings immediately following hospital discharge,” said Roz Brewer, CEO of WBA. “Our collaboration with CareCentrix is one of the many ways we are expanding on our pharmacy and patient expertise to surround individuals with care when and how they need it.”
Healthcare services delivered after discharge, including care delivered in the home, are one of the fastest growing segments in health care today. Caring for patients from the hospital to the home represents more than $75 billion in annual healthcare costs for payers, providers and patients, WBA noted.
“The most challenging part of the healthcare journey is the last mile – extending healthcare delivery into people’s homes,” said John Driscoll, CEO of CareCentrix. “Together with Walgreens Health, CareCentrix is able to combine Walgreens trusted community presence with our powerful technology-enabled care to better address patients’ unique health needs in their homes.”
In addition to home-based care, CareCentrix connects patients to appropriate providers and sites of care post-discharge, utilizing a predictive analytics platform, HomeFirst Analytics. This level of customization also includes pairing patients with care transition teams that support patient engagement for 90 days post-discharge to improve quality metrics.
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Walgreens Health will continue to advance capabilities that integrate CareCentrix data analytics and home care expertise with WBA’s portfolio of health solutions to identify and close care gaps, as well as coordinate patient care across conditions, settings and provider networks. These capabilities will enable Walgreens to support medication reconciliation for CareCentrix patients transitioning from hospital to home and provide primary care options to patients when needed.
CareCentrix also will play a critical role in Walgreens Health integrated offerings to manage population level risk for benefits management and post-acute spend and outcomes.
CareCentrix manages care for 19 million members through approximately 7,400 provider locations. By partnering with health plans and health systems, CareCentrix has reduced total cost of care for members by 20%, including a greater than 11% reduction in emergency department usage and a 23% reduction in skilled nursing costs, the company said.
This investment gives WBA majority ownership of CareCentrix, investing approximately $330 million for 55% of the company at an $800 million valuation, net of debt, with the option to acquire the remaining equity interests in the future. In WBA’s fiscal year 2021, CareCentrix delivered pro forma sales of $1.5 billion. Following the completion of the investment, CareCentrix will continue to operate as an independent company under its current executive leadership.
Sidley Austin acted as lead legal advisor for WBA, along with Weil, Gotshal & Manges. Citi acted as financial advisor for CareCentrix and Cleary Gottlieb Steen & Hamilton acted as lead legal advisor.