The news: Cigna plans to pour $450 million into its VC arm (Cigna Ventures) to invest in digital health tools and care delivery, with an emphasis on investing in early stage companies, per a recent Cigna press release.
More on Cigna Ventures: This isn’t the first time Cigna allocated funds to digital health investments.
Cigna is focused on cutting costs: The legacy insurer’s positive ROI from investments like digital musculoskeletal treatment startup RecoveryOne is likely fueling its ongoing interest in digital health innovations.
For example, earlier this year, RecoveryOne said it was expanding its partnership with its Cigna after the digital MSK entrant was able to reduce pain diagnoses for Cigna members.
What’s next? We suspect Cigna will leverage its VC arms to dive deeper into home healthcare investments as it preps for rising senior-related costs—and to stay on par with its competitors’ digital health innovation.
As more boomers age into Medicare over the next few years, there will be an influx of Medicare Advantage (MA) members.
As a result, insurers like Humana and UnitedHealth Group (UHG) are quietly pumping cash into home health companies to get members care in between doctors’ visits and prevent expensive readmissions.
Optum Ventures (UHG’s VC fund) and Humana are both investors in home healthcare entrant Dispatch Health, for instance.
But out of its 15 investments, Cigna has yet to make an investment in home healthcare. This means that could be the insurer’s next target in a play to cut costs and keep up with Humana and UHG’s home health tech.
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