- Cardinal Health has sold a majority stake in post-acute care benefits manager naviHealth to a private equity firm, with the aim of accelerating the division’s growth.
- Under terms of the deal, New York-based Clayton, Dubilier & Rice will acquire 55% ownership of naviHealth, leaving Cardinal Health with a 45% interest. The latter retains the right to reacquire the business.
- “CD&R’s investment enables us to invest in innovative solutions, expand our capabilities, and partner with health plans and health systems in more strategic ways," Clay Richards, the company's CEO, said in a statement.”
NaviHealth’s technology platform uses evidence-based protocols and clinical expertise to track patient recoveries and manage discharges, with the aim of lowering readmission rates and improving clinical decision-making.
The Nashville-based division’s website claims 2.5 million Medicare Advantage or ACO member lives are under its management for post-acute care and about 50,000 annual episodes are managed via CMS’ Bundled Payments for Care Improvement program. Its platform has led to a more than 15% drop in post-acute medical expenses, the website says.
The deal underscores the interest in solutions that support value-based care. Bundled payment models are promising, if not particularly flashy.
Experts say bundles can succeed in improving patient care, but may require mandatory participation to realize positive results. Health systems implementing bundled payments should work closely with physicians to explain the model and the changes it will necessitate.
Tamra Minnier, chief quality officer at UPMC, told a U.S. News & World Report conference audience last fall that the nonprofit system’s bundled payment models have been a huge success, performing well enough to earn a shared savings check from CMS. UPMC is reinvesting the savings into the program to further refine it.
Ron Williams, operating advisor to CD&R funds and former chairman and CEO of Aetna, will chair naviHealth’s board. Cardinal Health and CD&R will each name three additional directors, bringing the total to eight.
The deal is expected to close in the third quarter of this year.