“There’s no place like home.”

That iconic line from the “Wizard of Oz” is now the definitive mantra in the world of healthcare. If there were any lingering doubts as to where healthcare is ultimately headed, the nearly $8 billion deal announced Monday bringing Signify Health into the CVS Health fold should eviscerate it. Signify has a network of more than 10,000 clinicians that can visit patients at home.

“This deal represents the continued acceleration of healthcare into the home and the community,” said Ellen Herlacher, a health investor at LRVHealth. “This moves us closer to a vision of care in spaces that are accessible and familiar, delivered by people and brands that patients and consumers recognize, and business models that have completely different cost structures.”

Woonsocket, Rhode Island-based CVS Health reportedly muscled out other big names interested in acquiring Signify Health, including Amazon and UnitedHealth Group. The company’s senior leadership had suggested in its second-quarter earnings call that the company was pursuing deals in primary care and home health. And while it had failed in outbidding Amazon in its $3.9 billion purchase of One Medical that is innovating in primary care, CVS Health was successful in the home health arena. 

The purchase of Signify was at $30.50 per share in cash. The home health company has a network of clinicians in all 50 states and a nationwide value-based provider network. Signify uses home-based visits to identify a patient’s needs and then connects them with the necessary follow-up care and resources. The transaction is expected to close in the first half of 2023.

CVS winning this bidding war doesn’t exactly mean that this is a zero sum game.

“Amazon and United will have lots of other shots on goal, whether it’s hospital in the home (like Medically Home), urgent care in the home (like Dispatch), or staffing companies at scale … if the goal is to further penetrate the home, there will be many more opportunities for the big players to deepen their presence,” Herlacher said.

Another industry watcher echoed Herlacher’s comments regarding how crucial home care will be in the future, saying he expects more deals to come.

“The home care area has demonstrated amazing resilience throughout the pandemic and beyond,” said Ash Shehata, KPMG U.S. national sector leader of healthcare and life sciences. “The expectations for this industry are high and they are delivering innovative thinking and are ready to transform our new care delivery models with tech and better pricing models.” 

The home has become the new frontier for healthcare for a few reasons, Shehata said. Consumers are demanding it as people crave more convenience and affordability. With advances in technology and workforce changes, home-based care can be better than in a healthcare facility at times. Lastly, the home can also improve health equity, he said.

In that regard, CVS has taken a few different steps.

The company recently invested in affordable housing, and now is moving to make healthcare more accessible in the home.

“Anytime you have a company that sends people into the home, you have a company that is implicitly a social-determinants-of-health company,” Herlacher said. “You have eyes and ears in the home, you have a different type of relationship, you have a different type of accountability.”

However, others, such as Dr. Ali Parsa, CEO and founder of a virtual care company, Babylon Health, downplayed CVS Health’s move. He declared that the nearly $8 billion deal merely represents a consolidation of the traditional “sick care” model, in which care is provided reactively when someone is sick versus preventively.

“I don’t see it as a significant move by CVS to invent a healthcare sector,” Parsa said. “I see it more as taking advantage of a stronger currency, relatively stronger currency to consolidate more of the sick care continuum of services.”

However, this may change in the long run, he added.

“I think in the short term, you’re going to see in my view a lot more transactions like this … And in the long term, however, I think the really interesting trend is going to be as the sick care industry gets more and more consolidated, who’s going to actually invent the really valuable sector? And are CVS or others going to play a role in that?” he said.

Karen Lynch, CEO of CVS Health, would likely vehemently disagree with Parsa.

“This transaction is a significant step forward in our strategy to enhance our care delivery for our consumers and be able to meet their needs when and where they want care,” Lynch said in a call with analysts to discuss the purchase. “And the home is increasingly part of that choice.”

By combining CVS Health’s resources and Signify’s analytics and technology, the deal will help design new care models that expand the retail company’s health services, Lynch added.

It’s not just the average consumer that CVS Health may be able to reach in a different way through Signify Health. It can also reach providers. The Dallas company has a health consulting business — obtained through its acquisition of Caravan Health in March — that partners with more than 170 providers in accountable care organizations.

CVS Health’s purchase provides benefits to Signify as well, said CEO Kyle Armbrester on the conference call.

“As a part of CVS Health, we’ll have access to their industry leading expertise in managing risk and care management; their care delivery assets, both virtually and in the community, including CVS Pharmacy; and their expanded financial resources,” said Armbrester, who will continue to lead Signify Health following the purchase.

The deal will still need a regulatory approval and a positive shareholder vote from Signify stock holders. Should that be smooth sailing, it remains to be seen whether Signify Health’s new “home” can help its efforts to transform the dysfunctional, fragmented, colorless healthcare industry into a technicolor paradise of easy, affordable and equitable access.

Picture: CVS Health

Arundhati Parmar contributed to this post.