Bain Capital acquires majority stake in InnovaCare


Bain Capital Private Equity invested an undisclosed amount in InnovaCare Health on Friday, making the private equity giant a major shareholder in the value-based primary care provider group.

The new investment ousted Summit Partners from its majority stake in this 23-year-old system. InnovaCare will continue to be led by CEO Dr. Richard Shinto and the current management team, who will also retain significant ownership of the business. The company’s network of primary care providers currently treats more than 250,000 patients each year, including 27,000 Medicare Advantage members.

Shinto said that Bain’s cash injection will help InnovaCare expand its primary care business nationwide and compete with UnitedHealth Group’s Optum, Cano Health, and VillageMD. Shinto said that the goal of the 30-clinic clinic is to expand across the country outside of Florida and may triple its footprint in the next few years. He said the company also plans to double the number of its suppliers to more than 200 clinicians within a year.

“We already have a lot of opportunities, and we are working hard to enter other states, where large supplier groups really want to understand how to conduct risk-based, value-based medicine in a different way,” Shinto said.

However, unlike these competitors, InnovaCare will focus on transforming a fee-for-service doctor approach that serves all types of patient groups into a full-risk arrangement, Shinto said. Although the company’s “core focus” on the lucrative and growing Medicare Advantage population will inform its geographic growth, InnovaCare has transformed providers that serve a combination of commercial, Medicaid, exchange, and health insurance businesses into risk-based The ability of the entity will make its value proposition sweeter for suppliers, Shinto says.

Shinto stated that InnovaCare aims to increase government reimbursement by equipping providers with technology to better obtain health care effectiveness data and information sets, as well as safety and quality data under the medical insurance STARS program.

“We said to them,’I know you have Medicaid, I know you have business, I know you have paid services, and we will help you fully manage your practice,'” Shinto said. “If you only have the tools of MA, you will exclude them from other opportunities.”

In addition to competing with start-up clinic operators, InnovaCare will also compete with a new class of medical institutions Doctor Support Technology Company Like Privia Health and Agilon Health, they also aim to recruit service-charged suppliers in value-based contracts.

“InnovaCare is one of the select organizations to help the ecosystem provide value-based care,” said Andrew Kaplan, head of the Bain Healthcare Vertical. “There will be multiple winners. Our focus is on how you move from fee-for-service to value-based care, and this macro trend, rather than any single competitor.”

The transaction builds on the rising wave of private equity transactions in the healthcare sector. Soaring in 2020 Even though the total amount of private equity activity has fallen. According to a report released by Bain & Company earlier this year, global healthcare private equity transactions increased by 21% year-on-year to 380 transactions, compared with 313 transactions in 2019.

Bain’s co-founder is Utah Republican Senator Mitt Romney, who has been driving some of the growth.

The private equity giant has or already holds investments in everything from mental health management to dialysis centers to methadone clinics.The company’s cash injection came one week after Bain’s separate investment arm invested $150 million to launch a new health insurance brokerage company dedicated to the medical insurance advantage market, named Enhance health.

As the company’s influence in the healthcare field continues to expand, Bain has taken Industry fiascoKaplan says it’s like the doctor-managed company owned by investors that went bankrupt after private equity owners exited in the 1990s. He said that today’s environment and transactions are different from this era, thanks to new resources, technologies and an ecosystem dedicated to the growth of value-based care.

“We entered this opportunity to learn about history, but are excited about the future due to changes in the industry,” Kaplan said.

However, the advancement of private equity in healthcare has attracted some critics, including those of Bain, who believe that the company’s need to achieve high returns in a relatively short period of time may be comparable to the need to invest in quality and safety measures. conflict.

For example, after Bain Capital partnered with JH Whitney Capital Partners LLC to manage Aveanna Healthcare LLC, a child home care provider, a Bloomberg News Survey It was discovered that focusing on business development and cutting costs instead of safety and quality led to injuries and deaths of some children entrusted to Aveanna’s care.

“If you consider any business, there are revenues and costs, but the most important part is the ability to audit everything,” Shinto said. “The compliance established by the state, the federal government, and each company separately, really, really has a lot of control and supervision in this area, which is a good thing for healthcare, because our goal is to take care of patients In the right way. These oversights make a big difference.”



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