Amazon (NASDAQ: AMZN) is reportedly bidding to acquire value-based care platform Signify Health (NYSE: SGNY), which provides tech-enabled home health and complex care management services, among others.
Signify partners with payers and health systems to offer home-based care. The company’s complex care management program mirrors the interdisciplinary palliative care model, including symptom management, addressing psychosocial needs, advance care planning, and social determinants of health.
Rumors that the company would come up for sale began circulating earlier this month following reports from the Wall Street Journal, which also reported that Amazon was in the running as a buyer.
The news follows Signify’s decision in July to pull out of the U.S. Centers for Medicare & Medicaid Services’ (CMS) Bundled Payments for Care Improvement-Advanced (BPCI-A) program to refocus on expanding its home- and community-based services.
“Clients are seeing the value in our unique position: our ability to see patients in the home and refer them to care for the urgent needs we identify. This is particularly so with the social and behavioral needs that are crucial to improving care but are often very hard to assess in traditional care settings,” Signify Health CEO Kyle Armbrester, said in a statement. “We are making investments to create operational improvements that will increase efficiency, expand use of connected devices, and allow us to diversify into new services to drive better health outcomes in the lives of people we touch.”
Among those investments was the acquisition of accountable care organization management firm Caravan Health earlier this year for $25 million.
Signify’s stock prices rose more than 36% today in response to the Amazon news. The company is backed by the New York private equity firm New Mountain Capital, among other investors.
Previous reports indicated that CVS Health (NYSE: CVS) and insurance giant UnitedHealth Group (NYSE: UNH) were also bidding on Signify, with bids rising as high as $8 billion, according to the Journal. Amazon and UnitedHealth — which is in the process of acquiring the home health and hospice company LHC Group (NASDAQ: LHCG) — reportedly have made the largest bids.
None of the companies are commenting to the media about a potential sale or bids. Armbrester in a Q2 earnings report said, “We do not comment on market speculation.”
Signify earned $246.2 million in revenue during the second quarter of 2022, up 16% from the same period in 2021.
The company last year launched its Transition to Home program, designed to prevent readmissions by filling gaps in patient care and keep them in their homes. During its first year in operation, for example, the program identified more than 3,000 social determinants of health gaps. In year one, Transition to Home reduced 30-day hospital readmissions and 90-day readmissions by 13%, Armbrester indicated in Q2 earnings.
“This reduction in avoidable readmissions can generate significant savings for the health system and our clients since the average cost of the prevented Medicare readmission is estimated at $15,000 to $17,000,” Armbrester said. “When we bring these capabilities in the total cost of care models with our health system partners, we believe it will help drive material savings and better experiences for the patients.”
