Walgreens finalizes CareCentrix majority stake acquisition

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Walgreens Boots Alliance has completed its majority share acquisition of CareCentrix, a home-centered platform that coordinates care to the home for health plans, patients and providers.

Walgreens expects the majority investment will accelerate its healthcare delivery capabilities in a number of areas, including primary care, specialty pharmacy care, and post-acute and home care.

The partnership was pursued largely because of the belief that it would better address the needs of people with complex or chronic conditions as they transition out of the hospital. CareCentrix touted its analytics capabilities, with an emphasis on transition to home-based care that could potentially reduce hospital readmissions and improve patient satisfaction and outcomes.

WHAT'S THE IMPACT?

This investment gives Walgreens majority ownership of CareCentrix, investing about $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 Walgreens' 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.

Healthcare services delivered after discharge, including care delivered in the home, are one of the fastest-growing segments in healthcare today. Caring for patients from the hospital to the home represents more than $75 billion in annual healthcare costs for payers, providers and patients, according to Walgreens.

In addition to home-based care, CareCentrix connects patients to 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.

Walgreens Health said it will continue to advance capabilities that integrate CareCentrix data analytics and home care expertise with its 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 ostensibly enable Walgreens to support medication reconciliation for CareCentrix patients transitioning from hospital to home, and provide primary care options to patients when needed, including Village Medical physicians and advanced practice providers. CareCentrix will also play a role in Walgreens Health integrated offerings to manage population-level risk for benefits management and post-acute spend and outcomes.

THE LARGER TREND

CareCentrix manages care for 19 million members through approximately 7,400 provider locations. By partnering with health plans and health systems, the company said it 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.

Walgreens, meanwhile, is looking to expand its on-demand delivery services and will seek to do so through a collaboration with Shipt, an online marketplace that offers home delivery. And AllianceRx Walgreens Prime, a specialty home delivery pharmacy owned by Walgreens, is rebranding this summer as AllianceRx Walgreens Pharmacy, reflecting Walgreens' full ownership of the service, which was announced in January.

Twitter: @JELagasse
Email the writer: jeff.lagasse@himssmedia.com