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CVS Health invests in primary care provider; reportedly mulls $10 billion deal

CVS Health store
CVS Health Corp. has made a $100 million investment in Carbon Health.

CVS Health Corp. continues to expand its footprint into a full-service health care company.

CVS Health Ventures, the corporate venture capital platform of CVS Health, has made a $100 million investment in primary care provider Carbon Health. The investment will enable Carbon Health to expand into new markets and invest in technology as part of its goal to be a national leader in primary care, the company said.

In addition to the investment, CVS Health will also pilot the Carbon Health model and software in select existing CVS locations to help power the patient model for its customers.

In related news, Bloomberg reported that CVS is in negotiations to buy Oak Street Health Inc., which operates primary care centers that service Medicare recipients, for more than $10 billion.  Oak Street, which went public in 2020, has more than 160 centers across 21 states. 

Founded in 2015 and based in San Francisco, Carbon Health has more than 125 clinic in 13 states and also offers virtual care services. The company said it developed its "Connective Care" model to blend software and expert care with the aim to help patients establish relationships with their own integrated team, monitor and manage their health on the go, and access in-person care when and where they need it.

CVS, which operates approximately 9,900 locations nationwide, has been focused on expanding into primary care. In remarks during the company’s second-quarter earnings call in August, CEO Karen Lynch said the company was hoping to acquire a stake in a primary company by the end of the year.

The company, which purchased insurance giant Aetna in 2018, entered into an agreement in 2022 to acquire Signify Health for $8 billion. The deal is expected to close in the first half of this year.  

“Our investment in Carbon Health is another important step toward our vision of becoming the leading health solutions company for consumers,” said Vijay Patel, managing partner and co-founder of CVS Health Ventures. “This pilot will allow us to explore Carbon Health’s potential to advance the retail health experience, connecting consumers to care where and when they need it with a simple and engaging user-driven experience that can be adapted and delivered across our platform.”

In a statement, Eren Bali, CEO and co-founder of Carbon Health, said: We're focusing on everyday touchpoints with an integrated care team to help patients achieve better health outcomes – because health care is not just what happens during a visit but also what happens in between. Now, with the support of CVS Health, we can further accelerate our goal of designing healthcare as it should be – simple, flexible, and personal.”

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