Elevance, Clayton Dubilier And Rice Unveil Primary Care Venture Mosaic Health

An article from

Dive Brief:

• Elevance and its private equity partner have officially introduced their care delivery platform, called Mosaic Health, after teasing the joint venture earlier this spring.
• Mosaic is comprised of two of Clayton, Dubilier and Rice’s primary care portfolio companies — Apree Health and Millennium Physician Group — along with the care delivery and enablement assets of Elevance’s health services division Carelon.
• However, Mosaic is launching without Carelon’s advanced primary care platform, according to the announcement on Wednesday. Carelon’s assets will join Mosaic subject to ongoing regulatory approvals. An Elevance spokesperson did not respond to a request for comment on the timeline of approvals.

Dive Insight:

Elevance and CD&R announced plans in April to create a new primary care model that Carelon can sell to multiple insurers and use for Elevance’s clients. With Mosaic’s introduction, Elevance is following in the footsteps of rivals UnitedHealth, CVS and Humana, all of which have invested heavily in building out their provider networks, including through acquisitions.

Humana also partnered with a major private equity firm — Welsh, Carson, Anderson & Stowe — to help fund its primary care expansion.

By operating extensive care delivery assets, insurers can nudge their members to owned clinics, essentially paying themselves for providing healthcare. Payers argue owning care sites also gives them more visibility into members’ conditions and a greater ability to head off worse healthcare outcomes down the line. The businesses also diversify revenue streams, giving insurers a financial hedge against headwinds in core insurance units.

Mosaic is comprised of Apree Health, a digital navigation and clinical advocacy company formed when Vera Whole Health merged with Castlight Health in 2022, and Millennium Physician Group, a primary care platform serving almost 900 providers across multiple states.

Those CD&R assets will work with Carelon Health, Elevance’s care delivery business that currently operates 38 clinics in eight states and Washington, D.C., according to its website.

Mosaic is meant to tie together the distinct businesses to create a community-based care model supported by digital patient engagement, care coordination and navigation capabilities, according to the release. The model is launching at a time when insurers continue to try and provide wraparound services to clients fed up with point solutions.

Mosaic’s operating companies will become business units under the platform but will retain their distinct operations and brands, according to the release. The companies say Mosaic will serve nearly one million consumers in 19 states.

Elevance and CD&R have not disclosed the financial terms of the deal. However, Elevance’s investment in the combined company is through a combination of cash, an existing equity investment in Apree and the contribution of Carelon’s assets, according to a recent securities filing. Elevance holds an initial minority ownership position.

Last month, Elevance reported second quarter results that included $2.3 billion in profit, despite significant member losses as states recheck Medicaid members’ eligibility for the program and slowing growth in Medicare Advantage. The payer cut its long-term revenue growth guidance for its health benefits business, citing the challenges.