Just one month after its purchase of One Medical (Nasdaq: ONEM) for $3.9 million, Amazon (Nasdaq: AMZN) reportedly has its eye on another health care entity. This time around its Signify Health (NYSE: SGFY), a value-based care platform with home-based care capabilities.
Signify is potentially for sale in an auction that could value it at over $8 billion, according to reports from The Wall Street Journal.
Other rumored Signify bidders include CVS Health Corp. (NYSE: CVS) and UnitedHealth Group (NYSE: UNH). CVS Health was also a bidder for One Medical before Amazon won the sweepstakes.
Over the years, Amazon has become a player in the health care space, but purchasing Signify would solidify the company’s spot in the home-based care sector. Between Amazon Care, One Medical and its subsidiary Iora Health, Signify could be a piece of the puzzle that gives Amazon a very significant at-home care wing.
Buying Signify would position Amazon to appeal to payers, Nathan Ray, a partner at Chicago-based management and technology consulting firm West Monroe, told Home Health Care News.
“Signify would give them not just a larger provider exposure, but would also give them an asset that is integrating with payers in many ways to provide risk-adjustment and patient medical risk information through in-home assessments,” he said. “This would be an asset that appeals directly to the payer value proposition of the health care ecosystem, while also providing the unique entry point into home health.”
As a company, Dallas-based Signify is a tech-enabled, value-based care platform that partners with both health plans and health systems to deliver a variety of care services to patients in their homes.
Earlier this month, amid sale rumors, Signify announced that its home and community services segment will be one of its key areas of focus, as it is one of the company’s fastest-growing and most profitable businesses.
In Q2, Signify completed 624,000 in-home evaluations, which was a record for the company.
“A lot of the work Signify is doing is providing interventions in-home on behalf of payers to collect medical risk data,” Ray said.
None of the bidders, including Amazon, are guaranteed to finalize a deal. On its end, Signify has been exploring strategic alternatives, according to the Wall Street Journal.
While this could be a huge move for Amazon — especially in terms of home-based care — the company had already been taking steps towards the home.
In fact, Amazon had already rolled out a nationwide expansion of its Amazon Care program, which has virtual and at-home components to it.
“This could be something that may marry well with the work they’re already doing within their own employer health Amazon Care services,” Ray said. “It’s definitely a puzzle piece that I think can complement a lot of the things they’ve been doing.”
On the senior care side, last year the company designed a health care feature – via its Alexa device – that was meant to help family caregivers monitor seniors who want to age in place.
While Signify may have previously been on Amazon’s radar, there’s no question that the two companies crossed paths when the latter joined a consortium of health care organizations to form “Moving Health Home,” an advocacy group with the goal of changing federal and state policies to expand at-home care. Signify is a fellow member of Moving Health Home.
CVS and Amazon again going head-to-head here on a bidding process should not be a surprise, Ray said.
“Any company that is actively acquisitive with a scale retail or consumer exposure, like either of these ones, would be interested in both of those companies,” he said. “They happen to be playing in the same strategic ballpark. At their scale, there’s only so many interesting things that are worth pursuing.”
Ultimately, Amazon is building on what is essentially the heart of its business.
“Amazon does most of its engagement with all of us when we’re in our home, so I think building on that here gives them a lot of opportunities,” Ray said. “The biggest limitation is, obviously, having clinicians and a network nationally which Signify comes with.”
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