Carbon Health enters new markets with CVS Health partnership

Carbon Health has disclosed a partnership with CVS Health to test its primary and urgent care clinic model in the retail locations of the giant drugstore.

CVS’s corporate venturing arm spearheaded a $100 million investment to boost Carbon Health’s entry into new markets. Carbon Health’s investment in technology and expansion into new value-based care arrangements will be bolstered by the earnings from the series D financing.

CVS, which operates nearly 10,000 outlets in the U.S., has been concentrating heavily on primary care in recent years. Primary care, provider enablement, and home-based health care are three areas the organization hopes to strengthen.

Through the partnership, CVS Health intends to implement the Carbon Health approach and software in its retail stores to enhance the customer service provided to patients.

The company is interested in partnering with providers who have capable leadership and advanced technology infrastructure.

Outside of its drugstores, CVS has extensive healthcare connections thanks to its ownership of Caremark, a pharmacy benefits manager, and Aetna, a health insurance company.

On the other hand, hybrid primary care firm Carbon Health has announced more layoffs and corporate reorganization initiatives, roughly six months after it trimmed 8% of its global workforce.

CEO Eren Bali revealed the dismissal of more than 200 employees via social media. According to a tweet from Bali, the company would be shifting its focus from public health, patient telemonitoring, hardware, and chronic healthcare to primary and urgent care.

Bali stated that the layoffs affected “incredibly talented people” in all departments and called for other digital health businesses seeking new employees to consider hiring the laid-off staff. Numerous former workers of Carbon Health posted on LinkedIn about the layoffs that occurred as a result of business restructuring and how they affected “several teams.”

About 250 people were affected by the company’s layoffs in June. When explaining the layoffs, Bali pointed to the uncertainty of the financial markets as a major factor. “We’re still optimistic about the future. The current market conditions force us to be more diligent, focused and patient. We’re sad to see our colleagues go, but I couldn’t be more proud of what we achieved together,” he said.

When asked for comment, a Carbon Health representative did not provide one. Reportedly, discussions had taken place about licensing the firm’s proprietary EHR (electronic health record) to third parties.

The past two years have seen a boom for digital health companies driven by the pandemic, but shifting market dynamics have compelled several startups to trim down and reorganize their businesses.

In 2021, Carbon Heath was on a development surge with multiple acquisitions, including online diabetes management firm Steady Health, signaling a foray into remote, device-driven management of chronic illnesses. It expanded its at-home monitoring services by acquiring Alertive Healthcare in October 2021.

The digital health company also secured a massive $350 million in funding in 2021, raising its estimated valuation to $3.3 billion. The company has doubled its full-time workforce since the pandemic began in early 2020, growing to 1,600 employees. It opened over 80 facilities in 12 states and extended its virtual clinic network to 23.