Humana to double senior-focused primary care centers through joint venture

Private equity firm Welsh, Carson, Anderson & Stowe will contribute $600 million to a joint venture with Humana. The funds will be used to develop primary care centers for Medicare patients under Humana’s Partners in Primary Care subsidiary.

By ELISE REUTER at 3:21 PM February 3, 2020

Humana Inc. struck a $600 million joint venture with private equity firm Welsh, Carson, Anderson & Stowe (WCAS) on Monday. The new entity will focus on building out primary care centers for Medicare patients under Humana’s Partners in Primary Care subsidiary. WCAS, which is known for its investments in healthcare and technology, will contribute the $600 million and have a majority stake in the joint venture.

Partners in Primary Care currently has 47 centers in Kansas, Missouri, North Carolina, South Carolina, Texas and Florida. It will more than double the number of clinics it manages in the next three years under the joint venture.

“There is a significant unmet need for value-based, senior-focused primary care in the U.S.” WCAS General Partner David Caluori said in a news release. “Through this new joint venture, Partners in Primary Care is now well resourced to accelerate the deployment of its proven care model in areas across the country that need it most.  We are thrilled to be able to partner with Humana and Partners in Primary Care to expand access to quality care to the millions of seniors living in underserved areas throughout the nation.”

Humana currently has two senior-focused primary care groups: Partners in Primary Care, and Conviva, which operates in Florida and Texas. Collectively, the insurer reported $1.99 billion in revenue from provider services in 2018. The centers also add to Humana’s dominance in the Medicare Advantage market, where it reported 3.56 million enrollees in 2018.

The joint venture will solely focus on Humana’s Partners in Primary care subsidiary.

“We bring a differentiated offering and experience to seniors, often in areas where access to primary care is limited,” Renee Buckingham, segment president for Humana’s Care Delivery Organization, said in a news release. “We are excited to accelerate our growth through our partnership with WCAS. Together, we will be able to make this model available to more seniors and in more communities.”

Through the joint venture, Partners in Primary Care will receive a management fee, including performance-based incentives. The agreement also includes put and call options, through which Partners and Primary Care may acquire WCAS’ interest in the joint venture.

https://medcitynews.com/2020/02/humana-to-double-senior-focused-primary-care-centers-through-joint-venture/