CVS Health recently announced the sale of its Medicare Shared Savings Program (MSSP) business to value-based care services firm Wellvana. The sale will make Wellvana one of the largest value-based care enablement companies in the US, serving over 1 million Medicare beneficiaries.

MSSP enables doctors, hospitals, and other providers to form Accountable Care Organizations (ACOs) that serve Medicare beneficiaries by providing only necessary care. ACOs who comply with CMS standards are then eligible to receive a share of Medicare program savings.

This move follows a disappointing 2024. during which CVS saw its profits nearly cut in half due to soaring medical costs within its insurance business, Aetna.

Why Does It Matter?

CVS isn’t the only disruptor divesting care assets. The announcement coincides with similar sales from Walgreens, which announced its purchase by private equity firm Sycamore Partners 6 days ago. It is still TBD what assets the new owner will keep or divest, but many of Walgreen’s woes are attributed to their care delivery asset grab across the past few years, including value-based care company VillageMD. Along with struggles from the operational complexity of running care delivery, the Walgreens story also begs the question “Is value-based care incompatible with quarterly earnings?”

To account for underperforming assets, CVS seems to be returning to its roots. The company recently announced that it would be opening smaller, pharmacy-focused stores (one-third to half the size of their current 5,000 square-foot locations). This move is similar to Rite-Aid’s “apothecary model” and could signify a broader shift for national retail pharmacies.