Humana Set To Buy Senior-Based Primary Care Clinics For Up To $550M

For Humana Inc. (NYSE: HUM), the wheels are already in motion for the expansion of its senior-focused, value-based primary care clinics.

As part of Humana’s joint venture with private equity firm Welsh, Carson, Anderson & Stowe (WCAS), the company expects to pay between $450 and $550 million to acquire the first group of the JV’s senior-focused primary care centers.

During last week’s investor meeting, Humana’s Chief Financial Officer Susan Diamond said the company is well on its way to operating about 250 primary care clinics under the CenterWell and Conviva Care Solutions brands by the end of the year. The CenterWell brand includes primary care and, of course, CenterWell Home Health.

“Looking longer term, the total cash outlay from 2026 to 2030 is anticipated to be $2.5 to $3.5 billion, ramping throughout this time period as we accelerate the level of annual builds from 20 centers in 2020 to approximately 30 centers annually from 2023 to 2025,” Diamond said. “We anticipate funding these transactions with a mix of debt and cash on hand and expect these transactions to be accretive to our underlying earnings growth.”

The most recent joint venture between Humana’s CenterWell Senior Primary Care arm and WCAS was a $1.2 billion investment in value-based primary care clinics. The first agreement between the two earmarked $800 million to open 67 clinics by early 2023.

CenterWell is the largest senior-focused, value-based primary care group in the U.S. WCAS is a PE firm that mainly focuses on health care and tech.

As it stands, CenterWell will manage and operate the de novo clinics developed through the partnership. WCAS will have a majority ownership of the JV for the remainder of the agreement or until Humana decides it wants to acquire the firm’s interest. Humana could do so starting in 2028 or five years after the opening of each group of clinics.

Driving organic growth continues to be the best use of Humana’s capital, Diamond said, but it will still focus on strategic M&A opportunities — particularly in its home and primary care businesses.

Moving forward, Humana is focusing on integrating the CenterWell brands – such as primary care and home health, for example – and becoming a more efficient provider of care.

“I’m excited about [CenterWell Home Health] because it just emphasizes keeping patients at the center of everything that we do,” Susan Benoit, president of CenterWell Home Health, said last week during Home Health Care News’ FUTURE event. “We’re working on really trying to integrate and see how this interrelates to patient care and taking the best care of patients that we possibly can by working together through [our] different brands.”

Working across different brands and platforms, like home health and primary care clinics, creates a better environment for communication and coordination, Benoit said.

“Our clinicians are our eyes and ears,” Benoit said. “[It’s important for us to be] able to communicate with payers, primary care physicians and pharmacy to really be able to take care of that patient, improve outcomes and keep them out of the hospital.”