The news: Value-based care (VBC) healthcare analytics company Signify Health is considering selling its business—just 18 months after it went public and reached a $4 billion valuation, per the WSJ.
How we got here: Last month, Signify exited the CMS' bundled payments program—a big part of its business.
Signify Health says recent CMS policy changes that lowered prices per episode of care made the program’s pricing model unsustainable.
Instead, Signify Health announced it will pivot its focus to its home care business and its February 2022 acquisition of accountable care organization Caravan Health.
The problem: The cost to lure over and keep physician talent is going up, and multiyear VBC contracts don’t always account for that.
Our prediction: We expect to see more VBC-focused companies consolidate this year.
As the macroeconomic environment becomes more uncertain, it’s possible VBC models will become even more difficult to sustain. In fact, we’ve already seen well-established digital health entrants seek refuge in the arms of tech giants to avoid major organizational changes.
Further reading: We detail the current challenges digital businesses face during this period of uncertainty in our Era of Uncertainty report.
Go deeper: For more on how tech is transforming pharmacies, read our Digital Pharmacies 2022 report.
This article originally appeared in Insider Intelligence's Digital Health Briefing—a daily recap of top stories reshaping the healthcare industry. Subscribe to have more hard-hitting takeaways delivered to your inbox daily.