Signify Health to Purchase Caravan Health in $250 Million Acquisition

Signify Health Inc. (NYSE: SGFY) announced its first acquisition on Thursday.

The company signed an agreement to acquire Caravan Health, an accountable care organization (ACO) manager, for the price tag of $250 million.

“It doesn’t happen very often in this complex world of interests and companies, et cetera, that you find [an organization] that has such a great complementarity to what you do — virtually no overlap and then the ability to get going and work together from the close of the transaction in a really powerful way,” Francois de Brantes, senior vice president of Signify, told Home Health Care News. 


Based in Dallas, Signify is a tech-enabled value-based care platform. The company partners with both health plans and health systems to deliver various types of care to patients in their homes.

Currently, Signify has partnerships with roughly 2,500 post-acute care facilities.

Kansas City, Missouri-based Caravan Health works to help ACOs succeed in population health management and value-based payment programs.


On the home-based care front, De Brantes stressed that Signify’s ability to do in-home evaluations and social care coordination was a big reason why Caravan Health was interested in the deal.

“They need what we think of as our mobile field force of extenders that can go into Medicare beneficiaries’ homes and deliver medication reconciliations, peripheral artery disease checks, diabetic retinal exam checks and living condition evaluations,” he said. “That’s what our company does for Medicare Advantage (MA) plans, Medicaid managed care organizations and provider organizations involved in total-risk contracts.”

Additionally, the home is a central part of care for many of the facilities that are part of Caravan Health’s ACO network.

“If they can figure out how to keep the patient healthy at home, it means the patient won’t have to be airlifted or transported 1,500 miles, in some cases, to an acute care facility somewhere else,” De Brantes said. “No. 1, it helps keep the flow of care within the local community, as opposed to having the patient go a far distance to get care.”

Once the deal officially closes, Signify will have one of the largest national networks of providers engaged in risk-based payment models in the U.S.

Combined, Signify and Caravan Health contract with more than 3,200 health systems and physician group practices and 10,000 primary care physicians.

In the world of alternative payment models, Signify has been mainly focused on episodic care payments and bundled payments in fee-for-service Medicare, MA, managed Medicaid and with commercial payers. 

The organization didn’t have a solution for these payers to go beyond episodes of care, according to De Brantes.

“Episodes of care — the way we define them and work them in our programs beyond the Medicare bundled payment program, cover about 50 to 60% of the total medical spend of a health plan,” he said.

The acquisition allows Signify to have total cost of care risk arrangements.

“We can energize providers in episodes of care contracts and really drive them towards great performance,” De Brantes said. “We also have the ability to more broadly engage the delivery system in trying to maintain total cost of care targets.”

Alongside the acquisition, Signify also made a number of leadership team announcements.

Once the deal is complete, Lynn Barr, founder and chairwoman of Caravan Health, will become chief innovation officer of Signify Health. Tim Gronniger, CEO of Caravan Health, will become executive vice president of accountable care at Signify Health.

“We share with Signify Health a deep commitment to doing everything possible to help those we serve live their best life and look forward to accelerating our collective mission to create a health care system that works better for all of us,” Barr said in a press statement.

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