Humana, WCAS Throw $1.2 Billion into CenterWell Senior Primary Care Expansion

Humana Inc. (NYSE: HUM) and Welsh, Carson, Anderson & Stowe (WCAS) are pumping $1.2 billion into a joint venture to further expand senior-focused, value-based primary care clinics.

Specifically, Humana’s CenterWell Senior Primary Care arm will be the partner in the expanded WCAS relationship.

The success and expansion of senior-focused value-based primary care could potentially lead to more collaboration between these organizations and home health providers. This, in turn, opens the door for providers to engage in risk-sharing models. 

CenterWell is the largest senior-focused, value-based primary care group in the U.S.

On its end, WCAS is a private equity firm focused on technology and health care. WCAS also has a recently launched portfolio company, Valtruis, which is dedicated to value-based care.

As part of the JV, CenterWell and WCAS will develop 100 new senior-focused, payer-agnostic primary care clinics between 2023 and 2025.

“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,” Reneé Buckingham, president of Humana’s primary care organization, said in a press statement.

Per the agreement, WCAS will have majority ownership of the JV, and the de novo clinics developed through the partnership will be managed and operated under the CenterWell brand. 

However, the agreement includes an option that allows Humana to acquire WCAS’s interest in the JV starting in 2028, or five years after the opening of each group of clinics. 

Additionally, CenterWell will get a fee — which includes performance-based incentives — for managing these JV clinics. 

The partnership between Humana’s CenterWell and WCAS doubles down on a previous JV between the two organizations. That first JV agreement earmarked $800 million to open 67 clinics by early 2023.

As of March 31, 2022, the company operated 214 senior-focused primary care clinics that serve 180,000 patients in Medicare value-based arrangements. 

Though Humana’s organization is the largest of its kind, it’s not the only player when it comes to senior-focused, value-based primary care.

In particular, companies such as CareMax Inc. (Nasdaq: CMAX), VillageMD, Cano Health and Oak Street Health have made a dent in the senior care space by delivering services such as primary care, specialty care and coordinated services to older adults.

In general, there is a belief that this type of care delivery leads to better health outcomes for seniors.

“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,” Buckingham said in the statement.

Many of the players working in this space see future business opportunities for senior primary care centers and home health providers.

“We all spend more than half our lives in our home, so having ways that we can extend care, whether that’s maintaining health and wellness, or mitigating illness, is pretty critical,” Dr. Greg Sheff, who at the time served as interim president of home solutions at Humana, previously told Home Health Care News. 

Along these lines, VillageMD has already hit the ground running when it comes to home health partnerships.

“We have partners in home health, with our direct contracting,” Dr. Tom Cornwell, senior medical director of Village Medical at Home, told HHCN last year. “We work together to give these patients the greatest care — and then we all benefit when we can’t keep them out of the hospital.”