Best Buy Divests Current Health as Home Care Sector Faces Challenges

Best Buy has sold its home care firm Current Health back to co-founder Christopher McGhee, marking a significant shift in the electronics retailer's healthcare strategy. The divestiture comes amid broader challenges in the home care and retail healthcare sectors, with several major players reassessing their investments.

Current Health Reacquisition and Future Plans

Christopher McGhee, who co-founded Current Health, announced the reacquisition of the company from Best Buy in a LinkedIn post on Tuesday. The sale comes nearly four years after Best Buy initially purchased the home care business for approximately $400 million in 2021. While financial details of the latest transaction were not disclosed, the move represents a strategic pivot for both parties.

McGhee will resume his role as CEO, with other former team members, including co-founder Stewart Whiting, rejoining the company. In a statement, McGhee expressed his commitment to the future of home-based care: "I came back to build Current Health into a globally significant company. We have so much to do, and the story is not finished. The future of healthcare is in the home and the community, and we have a role to play in that transformation."

Current Health has made significant strides in the home care sector, working with over 70,000 patients and supporting more than one-third of all hospital-at-home care patients in the United States. The company has also established partnerships with major health systems, including Mass General Brigham, Geisinger, and Atrium Health.

Retail Healthcare Sector Challenges

Best Buy's divestiture of Current Health is part of a broader trend of retailers reassessing their healthcare investments. The company's health unit has faced headwinds, with CEO Corie Barry noting on a recent earnings call that while some segments like active aging and Lively products remain viable, the in-home health business has been slower to scale. Best Buy recently restructured its health business and recorded a non-cash goodwill impairment charge of $475 million related to the segment in its fourth quarter.

Other major retailers have also scaled back their healthcare ambitions:

• Walmart closed its network of health clinics and sold its telehealth assets last spring, citing challenging reimbursement environments and rising operating costs.
• Walgreens, which recently agreed to be acquired and taken private, is considering selling its stake in VillageMD after investing billions in the primary care chain.

These moves reflect the complexities and challenges of the healthcare sector, particularly as providers face financial pressures and uncertainty surrounds the future of federal government initiatives like the hospital-at-home waiver program.

Industry Outlook and Transition

Despite the challenges, industry leaders remain optimistic about the long-term potential of home and community-based healthcare services. McGhee noted that the health sector is still in the "early innings" of the shift from hospital care to home and community-based services.

Best Buy has committed to ensuring a smooth transition over the next few months, according to a company spokesperson. The retailer will retain its Lively senior support brand and emergency response devices as part of its ongoing health initiatives.

As the healthcare landscape continues to evolve, companies like Current Health aim to play a crucial role in transforming care delivery models. The coming months will likely see further adjustments and realignments as both traditional healthcare providers and retail entrants navigate the complex intersection of technology, home care, and changing patient needs.