The primary care battle: Where Optum, CVS, Walgreens stand

The primary care battle: Where Optum, CVS, Walgreens stand unknown

As healthcare disruptors such as Optum, Walgreens and CVS look to become bigger providers of medical services, the companies are eyeing potential primary care deals and acquisitions to compete with other managed care providers and private equity firms.

CVS

CVS has been making big moves to integrate its existing pharmacy and insurance businesses with its newest venture into the primary care market.

Most recently, CVS Health's VC arm invested $100 million into Carbon Health, a hybrid healthcare company focused on primary and urgent care.

Under this partnership, Carbon Health will be able to offer primary and urgent care services within CVS' retail locations.

Carbon Health has 125 physical locations in 13 states and a virtual care platform.

There has also been speculation that CVS is exploring a $10 billion acquisition of primary care provider Oak Street Health.

Oak Street Health runs primary care centers across the U.S. for recipients of Medicare and has private equity firms such as General Atlantic and Newlight Partners among its shareholders.

According to people familiar with the matter, a deal could be reached within weeks, although CVS has not confirmed its interest in the company.

This would not be the retail pharmacy's first attempt at growing its primary care business through mergers and acquisitions.

The company will complete its acquisition of Signify Health, a home health provider, later this year.

But CVS isn't the only pharmacy retailer making moves of late.

Walgreens

Shortly after becoming a majority investor in primary care provider VillageMD, Walgreens is set to acquire medical practice Summit Health in an $8.9 billion deal.

Once this deal closes, the new medical practice conglomerate will become one of the largest independent provider groups in the U.S., with 26 markets totaling 680 locations.

These moves demonstrate the continued push by many high-profile pharmacies into fast-growing healthcare markets such as senior care, primary care and home health.

Optum

In its earnings call, UnitedHealth Group's CEO said that an anticipated 4 million patients will be served under various value-based care models provided by Optum this year.

If achieved, this would add 1.8 million more patients to the company's 2022 total.

Optum is also doubling down on its value-based care partnerships of late.

Last year, the company purchased Refresh Mental Health, which includes a network of more than 300 outpatient sites. It also bought Houston-based Kelsey Seybold Clinic, a group practice with 24 locations, and its Medicare Advantage plan. In addition, Newton, Mass.-based Atrius Health and Dallas-based Healthcare Associates of Texas were acquired last year.

Optum is also expected to close on a $5.4 billion acquisition of Lafayette, La.-based LHC Group this year, which employs 30,000 people across 37 states. The home health purchase allows the company to reach a majority of the nation's Medicare population.