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The Healthcare Investor

Insights on Issues & Trends that Impact Investments in Healthcare & Life Science Businesses

Women in PE to Know: Mina Pacheco Nazemi

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are continuing our series of profiling women leaders in private equity. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. We are pleased to feature Mina Pacheco Nazemi of Barings Alternative Investments. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

Healthcare & Life Sciences Private Equity Deal Tracker: Cimarron Sells Linen King Stake to Seaport Capital

Posted in Healthcare Services Investing

Cimarron Healthcare Capital has announced it has sold its stake in Linen King to Seaport Capital.

Linen King, based in Tulsa, Okla., is a provider of outsourced healthcare laundry services to hospitals and healthcare facilities across the mid-South.

Cimarron, based in Bala Cynwyd, Pa., is focused on healthcare investments in the lower middle market. The firm prefers to make more substantial investments in healthcare services and technology companies.

Seaport Capital, based in New York, is a private equity firm in the lower middle market. The firm generally pursues investments in communications services, business and information services and media sectors.

Terms of the transaction were not disclosed.

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A View From the Top: Dr. Mark Alfonso of LucidHealth

Posted in Healthcare Services Investing

Please see below for the latest installment of our interview series, A View From the Top. This series features interviews with C-suite leadership of private equity-backed portfolio companies. This installment features Judson Ivy, founder and CEO of Ensemble Health Partners. To recommend a leader for a future interview, email Holly Buckley at hbuckley@mcguirewoods.com.

As a reminder, our 17th annual Healthcare and Life Sciences Private Equity and Finance Conference is February 19 and 20 in Chicago. You can register here.

Q: Why is medical leadership important in a radiology company?

Dr. Mark Alfonso: Leading a large physician organization requires a deep understanding of how to achieve true patient-centered care. LucidHealth provides clinical leadership in creating a quality care path with subspecialized radiologists reading designated studies in a timely manner, regardless of hospital size or location. We created a prioritized system of care based on when each patient presents that allows for record turnaround time across all locations. This care is delivered by specialists with advanced training in all areas of radiology. Timely treatment by uniquely trained radiologists is a critical value of LucidHealth’s care delivery.

Radiology is typically where the patient’s diagnosis begins. Being physician-led has created an infrastructure focused on tracking outcomes and studying data that provides value to us as radiologists, to our hospital partners and, most importantly, delivery of high-quality care to best meet the needs of patients. Understanding disease processes and creating systems of care requires medical leadership focused on the patient on an ongoing and consistent basis with defined measurement and a passion for best-in-class care. LucidHealth has strong physician leadership focused on creating this progressive care delivery model. It is this leadership perspective that differentiates the care we provide throughout the Midwest.

Q: Is it important for a physician leader to concurrently actively practice medicine?

MA: To effectively lead a radiology organization, you need to be in the midst of the care delivery to comprehend the impact of new advances in medicine and develop new models of enhanced care delivery. Radiology is changing rapidly. We have integrated artificial intelligence (AI) into our workflow to identify methods to create immediate action when abnormalities first present and provide advanced tracking of disease progression. These are revolutionary to radiology, and we have more integrations on the horizon. Understanding the application of these methods within the care model requires a deep medical intellect.

The next challenge is taking these new methods to radiologists across LucidHealth to the care sites. As a physician-led organization, LucidHealth established a Physician Executive Council (PEC) comprised of physician leaders across our states who provide clinical guidance throughout all LucidHealth practices. We also created a specialty connection where physicians across the enterprise connect through various means to discuss protocols and clinical guidelines to create state-of-the-art care delivery and focus on new procedures. While keeping the primary focus on the patient, our physician leaders are involved in many committees, serving in leadership roles on hospital boards and medical staffs, and providing clinical guidance across care sites. Physician leadership is a hallmark of LucidHealth.

Q: How does a large, consolidated practice translate to improved clinical outcomes?

MA: While LucidHealth values the support and infrastructure that accompanies the consolidated practice model, our physicians have been selective in partnering with like-minded groups that share the same passion for clinical integration. The benefits of our innovative technology, AI and data analytic tools enable LucidHealth practices to track patient processes and provide meaningful reporting to support hospitals and health systems. This infrastructure provides a valuable resource for operating in a value-based environment.

The power of a vast number of physicians focused on innovative patient care is transformative and what drives LucidHealth. Aligning the strategic and operational objectives around population health management, clinical decision support and advanced interventional services requires collaboration on common goals and performance. There needs to be a common culture among the radiologists to drive this change and improve outcomes. Combining forward-thinking practices accentuates the ability to lead the industry in technology and infrastructure, and to share clinical and operational best practices in order to focus on building a sustainable leader in the industry.

Q: What healthcare trend will cause the most change in the next 10 years?

MA: As AI continues to be at the forefront of radiology, LucidHealth has already clinically integrated intelligent algorithms into practice and used deep learning to guide our processes for years. AI will remain the frontrunner for years to come; however, machine learning cannot replace the personal subspecialized interpretation of complex imaging studies. AI allows for faster initiation of patient care and provides intelligent analytics of specific disease processes. Combined with our RadAssist workflow’s superior interoperability, we are able to integrate next-generation automated capabilities and track each patient’s need for follow-up. RadAssist has currently integrated seven algorithms.

It is apparent that AI will define a new healthcare landscape. The benefits of AI are enormous. Keeping focused on this trend as well as the advancements in imaging technology continues to guide our future planning. In the end, the power of the radiologist caring for the patient will be enhanced by these advancements and we want to be in a meaningful role in advancing our care to our patients. As always, payor and governmental trends drive change but often lose true focus on the patients. Radiologists must advocate for patients. Advancing these care models is that focus that drives LucidHealth.

About Dr. Mark Alfonso

Mark Alfonso, MD, serves on the board of LucidHealth as chief medical officer (CMO). He is an accomplished radiologist in practice for more than 22 years specializing in body imaging radiology. Dr. Alfonso received his medical degree from Northeastern Ohio University College of Medicine, completed his residency at Creighton University Medical Center and earned a fellowship in body imaging from the University of Louisville. He served as president of Riverside Radiology and Interventional Associates for 15 years and led the development of Premier Imaging Ventures: a number of business entities supporting the radiology practice. His visionary leadership has created a proactive response to the technological advances of the organization in maintaining the focus as a patient-centered practice. As CMO for LucidHealth, Dr. Alfonso leads the company’s Physician Executive Council and is a member of the practice integration group.

To contact Dr. Mark Alfonso, email malfonso@riversiderad.com.

Waud Commits $150 Million of Equity to New Healthcare IT Platform

Posted in Healthcare Services Investing

Waud Capital Partners has announced it has entered into a partnership with John Damgaard to build a healthcare information technology (IT) software platform.

Waud Capital has committed $150 million of equity capital to the partnership, which will build the platform via acquisition of companies and assets.

Damgaard is a healthcare IT veteran who most recently served as chief executive officer of MatrixCare, a developer of post-acute care software.

Waud, founded in 1993, seeks control equity investments in middle market companies in healthcare and a few other industries. Within healthcare, the Chicago-based firm targets the provider services, hospitals/major facilities, life sciences/pharmaceutical and non-reimbursement industries.

Up-and-Coming Women in PE to Know: Kristin Archer

Posted in Healthcare Services Investing

McGuireWoods is continuing its effort to profile up-and-coming women leaders in private equity. This profile series complements our existing Women Leaders in Private Equity profile series. For this profile, we are pleased to feature Kristin Archer of Trivest Partners. Access her profile.

To recommend a rising star for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

Healthcare & Life Sciences Private Equity Deal Tracker: Tryko Partners Acquires Philadelphia Skilled Nursing Center

Posted in Healthcare Services Investing

Tryko Partners has announced it has acquired Glendale Uptown Home.

Glendale Uptown Home, renamed Roosevelt Rehabilitation & Healthcare Center, is a 240-bed skilled nursing center in Philadelphia. The purchase follows similar investments made by Tryko in two other area skilled nursing facilities in and near Philadelphia.

Tryko Partners, based in Brick, N.J., is private equity investment group that seeks to acquire healthcare facilities and other types of real estate along the Eastern Seaboard and in the Midwest. Founded in 1989, the firm states it is involved in approximately 3,000 skilled nursing beds through its in-house healthcare division, Marquis Health Services.

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Healthcare & Life Sciences Private Equity Deal Tracker: Frazier Healthcare Partners Acquires EPTAM

Posted in Healthcare Services Investing

Frazier Healthcare Partners has announced it has acquired EPTAM Precision Solutions.

EPTAM, with locations in New Hampshire, Colorado and New Jersey, is an outsourced manufacturer of medical device and other components, medical implants and system assemblies. The company states it has particular expertise with plastic-, metal- and injection-molded components

Frazier Healthcare Partners, based in Seattle, is a provider of private equity capital to healthcare companies. The firm, founded in 1991, prefers to make more substantial investments from a dollars perspective and pursues a wide range of investment types, including company creation and venture capital to buyouts of profitable lower-middle market companies.

The transaction closed in December 2019. Terms were not disclosed.

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Women in PE to Know: Katie Harris Storer

Posted in Healthcare Services Investing

McGuireWoods has long been an avid supporter of the advancement of professional women. As part of our initiative seeking to expand the leadership of women in private equity, we are continuing our series of profiling women leaders in private equity. We are hopeful that this series will serve to inspire other women to pursue their careers in private equity in a way that best challenges and motivates them, which these impressive women have all done. We are pleased to feature Katie Harris Storer of The Carlyle Group. Access her profile by clicking here.

To recommend a woman for a future interview, email Amber Walsh at awalsh@mcguirewoods.com.

Healthcare & Life Sciences Private Equity Deal Tracker: WindRose Sells Trust Healthcare Consulting Services

Posted in Healthcare Services Investing

WindRose Health Investors has announced it has completed the sale of its portfolio company, Trust Healthcare Consulting Services (TrustHCS).

TrustHCS was acquired by a joint venture established by an affiliate of The Carlyle Group and Cannae Holdings.

TrustHCS, based in Springfield, Mo., is a provider of staffing and advisory services for coding, clinical documentation improvement, denial management and coding education solutions.

WindRose, based in New York, pursues control equity investments in healthcare companies. Founded in 2000 and formerly MTS Health Investors, the firm invests in a broad range of industry segments.

The Carlyle Group, with its U.S. headquarters in Washington, D.C., targets companies in healthcare and many other industries. Founded in 1987, the firm has more than 20 buyout funds and more than 10 growth capital funds.

Cannae Holdings, based in Las Vegas, is a diversified holding company with investments in technology-enabled healthcare services and other business lines.

Terms of the transaction were not disclosed.

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A View From the Top: Judson Ivy of Ensemble Health Partners

Posted in Healthcare Services Investing

Please see below for the latest installment of our interview series, A View From the Top. This series features interviews with C-suite leadership of private equity-backed portfolio companies. This installment features Judson Ivy, founder and CEO of Ensemble Health Partners. To recommend a leader for a future interview, email Holly Buckley at hbuckley@mcguirewoods.com.

As a reminder, our 17th annual Healthcare and Life Sciences Private Equity and Finance Conference is February 19 and 20 in Chicago. The save the date is available here. Please contact us for more information or to indicate an interest in participating on a panel.

Q: What do you believe is the most significant current challenge to growing your business and what will be necessary to overcome it?

Judson Ivy: Healthcare and, specifically, healthcare revenue cycle are changing drastically in the sense that there is a desire for payors and providers to come together. Eventually, to get cost out of the system and achieve improvements and efficiencies, this bridge between payors and providers must be built. But in today’s environment, there’s a distrust between them. Our job is to try to help resolve some of that distrust.

This is not necessarily a challenge to growing the business, but more specifically, market dynamics that are affecting how this industry sector will eventually evolve. There is still a great deal unknown about how to eventually bring payors and providers together, especially as distrust and misalignment in incentives persists.

I participated in a payor-provider summit a few weeks ago. The provider said to the payor, “Will you let me see the margin that you are making on this particular contract?” The payor’s answer was, of course, “No.” The provider responded by saying, “But you are asking me to go through your contracts and support price transparency. You want to see what my cost is through this equation. Why is what’s good for you not also good for me?”

As this exchange shows, getting payors and providers to work better today is going to be a challenge. Our job in the revenue cycle often requires our removing the barriers placed on providers, who are our customers, such as authorizations, denials or other such issues. There are a lot of pressures on providers today, including consolidation, payor behaviors and regulatory changes, which is a big reason why our business is growing.

Q: What plans do you have to further grow your business and what will be necessary to achieve this growth?

JI: Our plans are to continue to grow, but at a pace consistent with our founding ethos. We believe that, essentially, the devil is in the details. We believe that technology is an enabler, but it is not the largest differentiator between mediocre and great results. What we focus on is how do we hire great people to effectuate results for our clients and do this in a way that produces not only great financial results, but great customer satisfaction as well.

We are very proud of our customer satisfaction results and want to continue to grow the business around that ethos. We are adding some very innovative technological capabilities around artificial intelligence, machine learning and automation. We don’t do so with an eye toward replacing our people, but rather to augment what they do and allow them to focus on the higher-value work. We are looking at growing not into a tech company, but more of a tech-enabled services company that allows us to be more efficient and make better decisions.

Q: What do you think is the key to attracting and retaining your talent?

JI: Our culture is extremely important to me. It’s the one matter I will never compromise on. Since I started the company and was the first employee, through today when we have close to 5,000 team members, we believe that you need to treat people really well, whether they are mailroom associates or have executive vice president by their names. Engagement, making people feel valued, treating them like family, investing in their growth and giving them a purpose are key parts of what we do.

Giving purpose is tremendously important in our work. We’re in the business of providing services to healthcare organizations. Typically, it’s very easy for nurses, doctors or clinicians to find a purpose in what they do. It can be harder for billers, collectors or registrars to see how their work translates into providing better care for patients. They sometimes see it as purely transactional work. We make a daily effort to connect the dots for our associates, illustrating the impact that excellent revenue cycle performance has on clinical outcomes and patient experiences. Since we’ve been able to align our $16-an-hour employees with purpose, our turnover is much lower and engagement scores are outstanding.

People ask me, “What do you attribute your success to? How have you taken the business from one employee to almost 5,000? How have you achieved your client results?” I answer that the one thing we attribute this all to is our culture and people. Retaining our people is my top priority. They are the differentiator for us.

Q: What do you think is necessary to most effectively capitalize on the momentum of your recent private equity investment?

JI: One of the reasons we selected Golden Gate Capital (which invested in Ensemble in August 2019) was the experience it brought with technology outside of healthcare. It doesn’t have any other healthcare assets; that was a positive for us. We are trying to revolutionize the way that healthcare revenue cycle management works and essentially apply many of the lessons learned and value-adds from other industries. Our partnership with Golden Gate is designed to add capital around our investments in technology that will not, as previously stated, replace people, but help them make better decisions and focus on value-add work versus transactions.

Our partnership is about the long view. Golden Gate has a perpetual fund versus a set horizon to monetize the investment, so it is not on a three- or five-year horizon. That was important to us. We did not want to need to make decisions that negatively affected our customers and/or our associates and how we are going to grow the business. We can take a five- or 10-year perspective on how to make investments that will pay dividends for the life of the investment versus trying to get the business to be the most profitable within a three-year period.

Golden Gate wanted us to continue to run the business in a customer- and associate-centric way, believing that if we do those two things and then make additional investments in technology, the long-term result will be exponentially greater than a short window of purely trying to work toward a financial goal. This approach can be successful, but we’ve seen plenty of examples where bad decisions are made that affect customers and associates, simply to “succeed” in that three- or five-year window. We didn’t want that. We really felt that our long-term reputation in the marketplace is more valuable than a short-term window to create profit.

About Judson Ivy

Judson Ivy founded Ensemble Health Partners in 2014 after spending almost 15 years as a revenue cycle executive in large hospital corporations. His belief in loving what you do, providing excellent service and caring about your team are at the core of the Ensemble Health Partners’ philosophy. Ivy has extensive operational experience in helping providers maximize their revenue cycle operations, in addition to his ability to drive innovation within revenue cycle.

As vice president of revenue cycle at Health Management Associates, he was responsible for regional service center operations, patient access services, health information management and revenue integrity and analytics. Ivy held multiple related positions with Community Health Systems, including director of patient financial services, regional patient financial services director and vice president of the regional service center. As vice president at Community Health Systems, he was responsible for establishing a new regional service center and received multiple internal awards for his accomplishments.

Ivy is the co-author of “Cataract Surgery for the Revenue Cycle” and a member of HFMA and ACHE.

To contact Judson Ivy, email judson.ivy@ensemblehp.com.

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