Dive Brief:
Best Buy reported $109 million in charges primarily linked to restructuring at the electronics retailer’s health unit in its first quarter, the company said in earnings released Thursday.
The company began restructuring its health business after it recorded a non-cash goodwill impairment charge of $475 million in its fourth quarter ended Feb. 1, linked to a downward revision in the long-term financial projections for its health segment.
The retailer partners with healthcare organizations to provide in-home health services, but the business has taken “longer to develop than we initially thought,” as providers grapple with financial challenges and the future of the federal government’s hospital at home waiver seems uncertain, Best Buy CEO Corie Barry said during a call with investors Thursday.
Dive Insight:
Best Buy Health offers technology and logistics to support home care, including services for seniors aging in place, remote patient monitoring and hospital at home.
The retailer has notched several health technology acquisitions in recent years, including buying emergency response firm GreatCall in 2018 and senior remote monitoring company Critical Signal Technologies the following year. In 2021, Best Buy acquired home care platform Current Health.
The company has also inked deals with health systems like Mass General Brigham, Geisinger and Atrium Health to support home care programs.
Now, Best Buy seems to have hit some snags with its health unit. Although the company’s active aging services, Lively senior cell phones and medical alerts, and parts of its care at home business “remain very viable business models for the future,” its in-home health has been slower to scale, partly due to inconsistency in how long the federal government’s hospital-at-home waiver will last, Barry said on an earnings call.
The CMS’ Acute Hospital Care At Home program, first enacted during the pandemic to boost hospital capacity during COVID-19 surges, allows approved Medicare-certified facilities to provide inpatient level care in patients’ homes.
But the program has only been extended for short bursts. In March, Congress extended the waiver through September, shortly before the program and Medicare telehealth flexibilities were set to expire.
Another challenge for scaling hospital-at-home programs includes financial struggles among providers, Barry said. Hospitals have recently reported headwinds linked to market volatility and tariffs, as well as potential policy changes in Washington, like Medicaid cuts.
Still, Best Buy expects benefits from “ongoing efficiencies and effectiveness work streams,” including at the health unit, CFO Matthew Bilunas said on the earnings call. The company didn’t respond to a request for comment for more details on its restructuring.
“I think all of us would agree we absolutely see a future where more of your healthcare is taken into your own hands using technology and technology devices,” Barry said. “You can already see it across our assortment and across how people are choosing to take care of their own health and we will continue to lean into that part of the strategy.”
