Elevance Partners With Private Equity Firm On Primary Care

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Dive Brief:

• Elevance is partnering with a major private equity firm to build out its primary care offerings as the insurer looks to catch up with its peers in the care delivery space.
• Under a new deal announced Monday, Elevance is joining the care delivery and enablement assets of its health services business Carelon with two of Clayton, Dubilier and Rice’s primary care portfolio companies — Apree Health and Millennium Physician Group.
• The goal of the partnership is to create a new primary care model that Carelon can peddle to multiple insurers along with Elevance’s clients. When stood up, the platform will serve nearly one million consumers, according to the release.

Dive Insight:

Elevance is following in the footsteps of other insurance giants like UnitedHealth, CVS and Humana as it looks to build out its medical delivery services. Insurers have been investing heavily in their provider networks, snapping up doctor’s offices and inking partnerships with other investors to expand their reach.

By operating care delivery assets and directing their members to those centers, health insurers can pay their subsidiaries for delivering care and keep more of the healthcare dollar as profit.

Elevance operates Blues-affiliated plans in 14 states, and Medicare and Medicaid plans through a subsidiary called Wellpoint. Two years ago, the insurer launched Carelon, which includes a handful of primary care clinics.

But to scale its care delivery assets more quickly, Elevance needed a partner with a larger footprint, according to Arielle Trzcinski, a principal analyst at Forrester.

The new partnership with CD&R is “a necessary move as Elevance looks to hold its own with mega brands like CVS Health and UnitedHealth Group, which have entered the delivery space in a more aggressive manner,” Trzcinski said in emailed comments.

Elevance said its partnership with CD&R aims to create a new advanced primary care offering supported by care coordination, referral management and health coaching.

It’ll do so by combining 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.

In the release, the payer said its goal is to expand access to advanced primary care for consumers with a variety of insurance plans, including commercial, individual exchange, Medicaid and Medicare.

The new offering will also combine primary care delivery with clinical and benefits navigation for employers, as payers continue to try and provide wraparound services to clients fed up with point solutions.

Elevance and CD&R are not disclosing financial terms of the deal. A spokesperson did not respond to a request for comment.

However, Elevance said its investment will be through a combination of cash and equity interest in Carelon’s care delivery and enablement assets. The partnership won’t materially affect Elevance’s 2024 financial results, according to the release.

Elevance’s deal with the PE firm mirrors a similar arrangement between Humana and frequent PE collaborator Welsh, Carson, Anderson & Stowe to co-fund new primary care clinics under Humana’s CenterWell brand.