CVS believes that the future of health care is house calls from doctors.
The pharmacy giant announced Monday that it will buy Signify Health, which offers at-home health care visits, for $8 billion. Signify contracts with a network of 10,000 doctors and clinicians and about 2.5 million patients use its platform.
“This transaction is a significant step forward in our strategy to enhance our care delivery for consumers,” CVS CEO Karen Lynch said on a call with analysts Tuesday. “We gain a foundation for future expansion of home health care delivery.”
CVS said the acquisition will help it provide further care management for patients. CVS will act as a “care coordinator” for patients who use Signify, and executives said they are thinking about how to incorporate CVS’ clinics, pharmacies and other assets for these patients.
The move is CVS’ latest step away from brick-and-mortar retail and into healthcare.
Shoppers have been visiting drug stores less frequently in recent years and companies’ profits have fallen from lower reimbursement rates on prescription drugs.
In response, CVS (CVS) acquired health insurance company Aetna for $69 billion in 2018. It has also closed thousands of stores and added more basic health services at other locations in recent years.
“Retail is a very competitive sector where margins are under pressure. By comparison, healthcare is a lucrative industry which is growing at a rapid clip,” Neil Saunders, an analyst at GlobalData Retail, said in a note to clients.
CVS’ rivals have been striking deals to bolster their health care strategies of late, too. Walgreens (WBA) recently took a majority stake in CareCentrix, a home health care provider, and Amazon (AMZN) last month purchased One Medical for $3.9 billion, a membership-based primary health provider.
Amazon also acquired PillPack, an online pharmacy, in 2018 and launched its own digital pharmacy in the United States.