Humana and New York City-based investment firm Welsh, Carson, Anderson & Stowe have established a second joint venture to build more value-based primary care clinics for Medicare patients.
The partnership will invest $1.2 billion to develop approximately 100 new clinics between 2023 and 2025 and operate them to profitability. The investment firm will have majority ownership and Humana will have a minority stake, but the clinics will be operated under Humana's CenterWell Senior Primary Care brand, according to a May 16 news release.
Under the agreement, CenterWell will receive a management fee, including performance-based incentives, for the management of all joint venture clinics. The agreement also includes options through which Humana may acquire WCAS's interest in the joint venture beginning in 2028 or five years after the opening of each cohort of clinics, and through which WCAS may require Humana to purchase its interest in the joint venture beginning in 2030 or seven years after the opening of each cohort of clinics.
Previously, Humana and WCAS invested $800 million to open 67 clinics by early next year.
As of March 31, Humana operates a total of 214 senior-focused primary care clinics, comprising 37 under the current joint venture with WCAS and 177 other wholly owned centers. The 214 clinics — operating under the CenterWell Senior Primary Care and Conviva Care Solutions brands — serve approximately 180,000 patients in Medicare value-based arrangements, while also supporting 58,000 patients under Independent Practice Association arrangements through Conviva Care Solutions. By the end of 2022, Humana expects to serve Medicare patients in approximately 250 CenterWell and Conviva clinics and intends to add 30 to 50 additional CenterWell clinics per year through 2025.
"Physicians and patients alike are coming to recognize the many advantages of our unique, senior-focused primary care model," Reneé Buckingham, president of Humana's primary care organization, said. "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."