Fresenius enters the preventive healthcare industry

What happened

A few days ago, Fresenius Medical Care (FMC) announced plans to expand its U.S. business with a value-based kidney care merger. 

The North American subsidiary Fresenius Health Partners will join forces with Interwell, a kidney physician network, and Cricket Health, a U.S. provider of kidney therapies. Here are the details:

• FMC will become the majority shareholder of the new company, which is valued at $2.4 billion. 
• The company is expected to operate under the “Interwell Health” brand and provide care to more than 270,000 people with kidney disease by 2025. 
• Fresenius Medical Care operates more than 4,000 dialysis centers for kidney patients worldwide, treating around 345,000 patients in total.
• The proposed merger combines Fresenius Health Partners' expertise in kidney care, Interwell Health's network of 1,600 nephrologists, and Cricket Health's technology-enabled care model.

The overall goal is to reduce hospitalizations and readmissions, slow disease progression, increase transplant referrals and rates, accelerate the transition to home dialysis, and improve health equity. FMC expects the deal to close in the second half of the year. 

Why it matters

On several occasions, we have described that a shift from clinical to preventive care is emerging in many areas of healthcare. 

In the past, kidney care focused primarily on people who needed dialysis—a costly treatment. But Interwell Health executives want to turn the idea of kidney care on its head. Robert Sepucha, CEO of Cricket Health, pointed out that “there are about 600,000 Americans on dialysis, but there’s 36 million Americans with kidney disease prior to kidney failure.” 

Interwell Health will acknowledge the entire patient journey: more convenient dialysis, at-home services, and patient education for disease management and lifestyle changes. 

Needless to say, this is not only interesting from the patient's point of view, but also from the perspective of changing business models. If FMC is to be believed, the potential market for Fresenius in the U.S. will grow from $50 billion to $170 billion with Interwell Health. 

The holy grail 

Value-based preventive care is increasingly outpacing volume-based care models. Although renal failure cannot be completely prevented, delaying it is a goal well worth pursuing. 

Yet this will require new operating models. Individual healthcare providers are, of course, limited in what they can do. And that's why portfolio approaches like Interwell Health are welcoming. They bring together the right ingredients for a holistic patient journey, improving patient education and care as a result.