Walgreens Boots Alliance (WBA) Makes Majority Investment in CareCentrix
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Today, CareCentrix, Inc. — the leading, independent home-centered platform that coordinates care to the home for health plans, patients, and providers — announced that Walgreens Boots Alliance (Nasdaq: WBA) has made a majority investment in the company.
The investment advances Walgreens capabilities in post-acute and home care, in support of its launch today of Walgreens Health, the company’s customer-centric, technology-enabled care model powered by a nationally scaled, locally delivered healthcare platform.
Walgreens Health will create a better experience for consumers, improve health outcomes and lower costs by leveraging Walgreens strengths and assets, including trusted consumer relationships and community presence, national scale, care teams and partnerships with payors and providers across the country.
“In support of the launch of Walgreens Health, we continue to make strategic investments in pharmacy and healthcare solutions that can improve care coordination and health outcomes, while lowering overall costs,” said Roz Brewer, CEO, Walgreens Boots Alliance. “CareCentrix’s suite of home care solutions will advance our capabilities in this important segment for healthcare delivery, to help address the needs of people living with complex or chronic conditions in the home.”
Post-acute care, specifically care that is delivered in the home, represents one of the fastest growing opportunities in healthcare. Caring for patients from the hospital to the home represents more than $75 billion in annual healthcare costs for payers, providers, and patients, and that total is growing rapidly in the wake of the COVID-19 pandemic.
“COVID-19 has made it clear that providing care in the home and community is the future of not only post-acute care, but healthcare more broadly. Indeed, the home is the last undeveloped frontier in American healthcare and critical to reversing spiraling costs and middling health outcomes,” said John Driscoll, CEO of CareCentrix. “Together, Walgreens and CareCentrix will be able to partner with a wide range of payers to help care for patients from the hospital to the home in a more personalized, engaged, and effective way.”
CareCentrix offers the suite of services needed, on an integrated basis, to support emerging home care models, including care transitions, home nursing, durable medical equipment, home infusion, and in-home palliative care. Success is driven through a relentless focus on operational excellence, a national home provider network, and enabled by HomeBridge, a machine learning, proprietary analytics-driven care coordination platform that develops hyper-personalized care plans. By managing the journey to the home and care in the home and providing personalized care, CareCentrix helps patients avoid unnecessary care, stay engaged in their care, and enjoy better health outcomes.
“CareCentrix is transforming the post-acute journey from hospital to home to support value-based care, lower costs, and improve outcomes and member experience. We are excited about the opportunity before us to build industry leading, home-focused care solutions,” said Laizer Kornwasser, President and Chief Operating Officer of CareCentrix.
CareCentrix manages care for 19 million members through approximately 7,400 provider locations, and empowers more people to live, heal, and age at home. By partnering with health plans and health systems, CareCentrix has reduced total cost of care for members by 20 percent, including a greater than 11 percent reduction in emergency department usage and a 23 percent reduction in skilled nursing costs.
This investment gives Walgreens Boots Alliance majority ownership of CareCentrix, investing $330 million for 55 percent of the company at an $800 million valuation, net of debt, with the option to acquire the remaining equity interests in the future. Following the completion of the investment, CareCentrix will continue to operate as an independent company under its current executive leadership.
The transaction is subject to the receipt of required regulatory clearances and approvals and other customary closing conditions and is expected to close by the end of WBA’s second quarter of FY2022.
Citi acted as financial advisor for CareCentrix, Inc., and Cleary Gottlieb Steen & Hamilton LLP acted as lead legal advisor.
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