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September 20, 2022

Around the nation: Humana announces $550M investment in private equity clinics

Daily Briefing

    Starting in 2025, Humana will acquire 20 CenterWell Senior Primary Care clinics, in today's bite-sized hospital and health industry news from California, the District of Columbia, and Kentucky.

    • California: Gov. Gavin Newsom (D) on Wednesday signed the Community Assistance, Recovery and Empowerment Act, which would enforce a court-ordered treatment plan for homeless people with mental health disorders. Under the legislation, family members, first responders, and others would be able to ask a judge to create a treatment plan for people experiencing homelessness who are diagnosed with certain disorders. The court could then order a treatment plan for up to one year, with the ability to extend treatment for an additional year. If an individual refuses treatment, they could be placed under a conservatorship. While California typically addresses homelessness on a local level, with billions of dollars distributed to city and county governments annually, the state's homeless population currently surpasses 100,000. "Continue to do what you've done and you get what you got.And look what we've got. It's unacceptable," Newsom said. "This (law) has been architected completely differently than anything you've seen in the state of California, arguably in the last century." (Har/Beam, Associated Press, 9/14)
    • District of Columbia: Last week, a group of 375 organizations wrote a letter to Senate Majority Leader Chuck Schumer (D-N.Y.) and Minority Leader Mitch McConnell (R-Ky.), calling on the Senate to extend telehealth pay. Amazon, CVS Health, Google, and One Medical were among the signatories, along with several health systems, including Trinity Health, MedStar Health, and Cleveland Clinic. In addition, several industry associations signed the letter, including the Federation of American Hospitals and the American Medical Association. "Virtual care is now a fundamental part of the U.S. healthcare system, and it will improve patient access to high quality care and strengthen continuity of care well beyond the COVID-19 pandemic," the letter said. "Unfortunately, without statutory certainty for remote care the hard work of building infrastructure, trust, and relationships with these communities is beginning to stall," the organizations wrote. (Goldman, Modern Healthcare, 9/13)
    • Kentucky: Humana CFO Susan Diamond on Thursday announced that Humana will spend up to $550 million to purchase 20 CenterWell Senior Primary Care clinics, which were built through a joint venture with private equity firm Welsh, Carson, Anderson & Stowe. Starting in 2025, Humana will purchase the clinics using a combination of debt and cash. According to Diamond, the investment is part of Humana's plan to grow its primary care services for the elderly. "We plan to expand our primary care platform to build on our leadership position in this space, with the expectation that our earnings from this business will become a meaningful contributor to enterprise earnings as additional cohorts are acquired from the JV and the business continues to mature and scale beyond 2025," Diamond said. (Tepper, Modern Healthcare, 9/16)

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