Humana has better odds than CVS Health of acquiring Cano Health because the insurer already has a right-of-refusal agreement with the company and a huge position in the Medicare Advantage market, according to market researcher Insider Intelligence.
CVS Health and Humana are among the potential buyers for Cano Health, a tech-driven primary care disruptor, Bloomberg and The Wall Street Journal reported recently. Humana has the right-of-refusal arrangement in the event of a sale as part of a 2019 agreement with Cano, the Journal reported.
Whoever wins the bidding war will gain a strong foothold in senior primary care, as about 44 percent of Cano Health's patients are on Medicare Advantage, a value-based care program for seniors, Insider Intelligence reported. Humana is already second in the Medicare Advantage market behind UnitedHealthcare.
If CVS Health loses out on the acquisition, it could turn its attention to other primary care disruptors that serve seniors, including Oak Street Health and ChenMed, according to Insider Intelligence.
Either way, expect both CVS Health and Humana to look to get bigger. "There is no one-and-done asset," Shawn Guertin, CVS Health's executive vice president and CFO, said during the company's second-quarter earnings call, as Insider Intelligence reported.