Walgreens Boots Alliance subsidiary VillageMD has acquired Summit Health-CityMD in an $8.9 billion deal, the company announced Thursday.
The deal closes on January 3, creating a combined company with approximately 20,000 employees in more than 680 locations across 26 markets providing primary, specialty and urgent care. Walgreens paid $3.5 billion for the acquisition and owns the majority of Chicago-based VillageMD stock. Cigna subsidiary Evernorth spent $2.5 billion on the deal. VillageMD and Summit Health-CityMD announced plans to merge in November.
VillageMD CEO Tim Barry is leading the incorporation and overseeing the integration. Barry spoke to Modern Healthcare about his priorities for the coming months. Here are five key points:
1. General care
Barry says VillageMD’s “ultimate goal” is to be a multi-specialty provider. Previously, the company focused on primary care and was developing strategies for which specialties to bring to individual markets. VillageMD plans to provide intensive care in several locations this year, he said. The company plans to continue to grow its primary care service and leverage CityMD’s existing urgent care model. “We think we’ll continue to grow for decades, but we also have to make sure we can balance that with our ability to deliver on our promises.” VillageMD is looking to expand into new markets, but Barry declined to provide details.
2. Risk-based payout
VillageMD is a proponent of risk-based payment models and wants to build on that model at Summit Health, which has signed capitation contracts with several Medicare Advantage insurers, Barry said. He designated New Jersey as a market of interest to Medicare Advantage. VillageMD could also impart some care management knowledge to Summit Health and create more touch points for patients, he said.
3. Leadership
VillageMD will soon announce a new leadership team with executives from both partners. Former Summit Health CEO Dr. Jeffrey Le Benger serves as interim chairman while the company is looking for a permanent member. Barry said the newly created role was necessary because the organization was growing rapidly. “Not too long ago, we had 1,000 employees,” he said. He said the company will look to add other leadership positions, but that duplicate roles will be cut.
4. Data Access
Barry said vendors need better access to performance data. For example, a surgeon can find out how many patients have complications months after the procedure. “People talk a lot about results, but… very few organizations want to move that data forward. Not for the sake of saying, ‘Hey, you’re good. You’re bad.’ It’s more than that: How do we all acknowledge where we are and everyone is trying their best, but how do we make sure we get better?” he say.
5. Company culture
One of Barry’s top priorities is to develop a unified corporate culture with an emphasis on transforming healthcare. To do that, he wants the leadership team to be present in 26 markets. Practical and technology-based ways to build culture, such as moving all employees to the same system or holding company-wide meetings at town hall, will be part of the process, he said. there.
