Walgreens Boots Alliance subsidiary VillageMD has acquired Summit Health-CityMD in an $8.9 billion deal, the company announced Thursday.
The deal, which closed Jan. 3, creates a combined company with roughly 20,000 employees in more than 680 locations across 26 markets that provides primary, specialty and urgent care. Walgreens paid $3.5 billion for its share of the acquisition and owns a majority of Chicago-based VillageMD stock. Cigna's Evernorth subsidiary spent $2.5 billion on the deal. VillageMD and Summit Health-CityMD announced merger plans in November.
VillageMD CEO Tim Barry is leading the combined organization and overseeing the integration. Barry spoke with Modern Healthcare about his priorities for the coming months. Here are five key takeaways:
1. Multispecialty care
VillageMD’s “ultimate goal” is to become a multispecialty provider, Barry said. The company has historically focused on primary care and is developing strategies for what specialties to bring to individual markets. VillageMD intends to offer specialty care in a few locations this year, he said. The company plans to continue growing primary care and capitalize on CityMD’s existing urgent care model. “We think we’re going to be continuing 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 offer details.
2. Risk-based payment
VillageMD is a proponent of the risk-based payment models and wants to build that up at Summit Health, which has already signed capitation contracts with several Medicare Advantage insurers, Barry said. He named New Jersey as a market of interest for Medicare Advantage. VillageMD can also pass along 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 is interim president while the company searches for a permanent one. The newly created role is needed because the organization is rapidly growing, Barry said. “It wasn’t too long ago that we had 1,000 employees,” he said. The company will look to add other leadership positions, but duplicate roles will be cut, he said.
4. Data access
Providers need better access to performance data, Barry said. For example, a surgeon should be able to find out how many patients had complications months after undergoing procedures. “People talk a lot about outcomes, but … there are very few organizations that want to bring that data forward. Not with the purpose of saying, ‘Hey, you’re good. You’re bad.’ It’s more of: How do we all just acknowledge we are where we are and everyone is trying their best, but how do we ensure that we get better?” he said.
5. Company culture
One of Barry’s top priorities is developing a united corporate culture that emphasizes healthcare transformation. To do that, he wants the leadership team to be visible across the 26 markets. Practical and technology-driven ways to build culture, such as moving all employees to the same system or holding companywide town hall meetings, will be part of that, he said.
