Signify Health, the value-based home health provider reportedly being pursued by CVS Health, plans to cut its workforce as it shifts away from its episodes of care business.
On July 8, Signify Health announced it was winding down its episodes of care business and plans to exit a major bundled payment program. Signify, a platform that leverages analytics and nationwide networks to build and back value-based care programs, will exit the Centers for Medicare & Medicaid Services' (CMS') Bundled Payments for Care Improvement-Advanced (BPCI-A) model. The main hurdle, the company said, is CMS' newly released retrospective trend calculations, which reduced the opportunity for savings.
The layoffs are related to the wind-down of the company's episodes of care business, a company spokesperson confirmed to Fierce Healthcare.
Last week, media reports said the Dallas-based company planned to lay off nearly 500 people.
According to state documents, 175 of the 489 employees will be affected in New York; 45 of the layoffs will come from Signify’s Norwalk, Connecticut, office, CT Insider reported Friday. The majority of the layoffs, 342, will involve individuals who are working remotely. The layoffs will start Oct. 1, the company told state officials.
Lynn Shepherd, vice president of strategic communications with Signify, confirmed the layoffs to Home Health Care News last week. “We are reducing our workforce in consideration of the fact that, as we announced in July, we are transitioning our focus from a stand-alone episodes offering to a total cost of care management solution," Shepherd said. "We have notified employees whose roles are impacted by this decision.”
Going forward, Signify will continue to focus on its growing Home and Community Services segment, including its recent acquisition of Caravan Health. Leaving BPCI-A allows the company to continue making investments in growing and diversifying that business, Signify said.
It was also reported earlier this month that CVS was eyeing a deal to buy Signify Health.
The company is exploring strategic alternatives including a sale, The Wall Street Journal reported. Initial bids are due this coming week and CVS is planning to enter one, according to people familiar with the matter, the WSJ reported.
Signify Health completed a $564 million public stock offering just 18 months ago.
In other layoff news, digital pharmacy startup Truepill is laying off about a third of its workforce, the third round of reductions in 2022, according to media reports.
Sources told TechCrunch the company eliminated about 175 positions.
Former employees posted about the layoffs on LinkedIn last week.
In June, chief executive and co-founder Sid Viswanathan confirmed that he laid off an additional 15% of staff, impacting 150 people, according to TechCrunch.
Launched in 2016, San Mateo, California-based Truepill offers a B2B application program interface that enables pharmacy fulfillment and delivery, white label packaging and product design. The company expanded its offerings beyond pharmacy fulfillment and delivery to include telehealth and an at-home lab testing network.
Truepill has raised $255 million in venture capital funds, according to Crunchbase.
Other recent layoffs at healthcare-related companies include meditation app Calm, which eliminated 20% of its workforce, the WSJ reported.
Health insurance marketplace GoHealth also recently said it will lay off about 800 employees. The cuts represent 20% of its workforce and come as the company has struggled to control costs despite seeing revenue growth, The Chicago Sun Times reported.
Virtual care company Included Health, which was formed through the merger of Grand Rounds Health and Doctor on Demand last year, recently reduced its headcount by less than 6%, a company spokesperson confirmed to Fierce Healthcare.
The companies join digital pharmacy Capsule, weight loss telehealth company Calibrate, digital health startup Ro, healthcare payments company Cedar, healthcare automation startup Olive and Carbon Health slashing head counts in the face of a market downturn.
Primary care company Forward, reportedly worth more than $1 billion, recently cut 5% of its workforce.
Health tech companies cutting staff this year included Mfine, a Bengaluru, India-based platform company (600 employees laid off); Stockholm-based digital health company Kry (100 employees); Thirty Madison, which recently merged with Nurx (24); divvyDOSE (62); Noom (495); Ahead (44); and Chinese healthcare company WeDoctor (500), according to Layoffs.fyi, which keeps a database of reported layoffs.