Private Equity Healthcare Acquisitions – April 2024

In light of continued investor interest in healthcare and the risks associated with private equity ownership of healthcare companies, the Private Equity Stakeholder Project is tracking private equity-backed healthcare acquisitions. Below is a list of private equity healthcare buyouts, growth investments, and add-on acquisitions completed or announced during April 2024. We will continue to track acquisitions on a monthly basis.

See March 2024 acquisitions here.

Private equity dealmaking in April included companies focused on Medicare, including a Medicare Advantage market tech platform, a complex care provider, and a value-based long term care provider.

SunFire – KKR

KKR has acquired SunFire, a healthcare tech platform for health insurance markets, from Stone Peak Capital. SunFire primarily provides Medicare Advantage, Prescription Drug and Medicare Supplement plan quoting and enrollment technologies.[1]

A frequent healthcare investor, KKR’s buyout of SunFire comes on the heels of two recent large-scale bankruptcies by other healthcare companies it owned: physician staffing giant Envision Healthcare and oncology provider GenesisCare. [2]

It acquired SunFire as part of its Health Care Strategic Growth (HCSG) initiatives, [3] through which it has also made investments in medical supplies, youth behavioral health, and diagnostic technology.

The growing multibillion-dollar Medicare Advantage (MA) industry has drawn significant interest from private equity investors, as firms have made acquisitions across a range of core and ancillary MA services, including insurance plans, in-home health assessment companies, and brokerage and marketing firms. [4]

In February 2024, PESP released the report “How Private Equity Gets Its Cut from Medicare Advantage,” which examines private equity’s presence in the MA market.

HarmonyCares – K2 HealthVentures

K2 HealthVentures made a growth investment in HarmonyCares, [5] a leading provider of home-based primary care services for medically complex/fragile patients. Its services include primary care, home-based skilled nursing and therapy, hospice, mobile diagnostics, and health assessments. [6]

In addition to K2 HealthVentures, HarmonyCares is owned by a consortium of private equity firms including Rubicon Partners, Welsh, Carson, Anderson, & Stowe, Oak HC/FT, and HLM Venture Partners. [7] The company was known as U.S. Medical Management until the private equity firms rebranded it to HarmonyCares in 2022. [8] The acquisition by the private equity consortium occurred a month after the company agreed to pay the United States $8.5 million to resolve allegations of overbilling Medicare. [9]

Frail seniors and dual-eligible individuals with behavioral needs are among the highest healthcare spenders, making complex care providers like HarmonyCares lucrative targets for private equity firms. For example, KKR-owned Brightspring Health noted in its annual SEC filing that “Medicare beneficiaries with four to five chronic conditions have 500% greater healthcare spending, and beneficiaries with six or more chronic conditions have 1,500% greater healthcare spending.” ^[10]

Private equity buyouts of providers that serve people with complex needs raise concern, as the private equity business model of extracting outsized profits through risky financial tactics puts patients at risk as well as threatens the sustainability of Medicare and Medicaid programs.

Premier Geriatric Solutions – Enhanced Healthcare Partners

Enhanced Healthcare Partners acquired Premier Geriatric Solutions, a provider of primary and behavioral healthcare for post-acute care facilities including skilled nursing, long-term, assisted-living, and independent living. It operates in Virginia, West Virginia, and North Carolina. [11]

Enhanced acquired Premier Geriatric through its platform company Eventus WholeHealth, which it has owned since January 2019. Eventus specializes in value-based care for elderly and disabled patients in long-term care settings. [12]

In 2022 Eventus WholeHealth agreed to pay $327,000 after self-disclosing conduct to the Office of the Inspector General. The OIG alleged that Eventus submitted claims to Medicare for services that were not rendered or were medically unnecessary. [13]

April 2024 Buyouts

April 2024 Add-on Acquisitions

April 2024 Growth Investments

[1]https://www.businesswire.com/news/home/20240402643144/en/SunFire-Announces-Investment-from-KKR

[2]https://pestakeholder.org/reports/private-equity-healthcare-bankruptcies-are-on-the-rise/

[3]https://www.businesswire.com/news/home/20240402643144/en/SunFire-Announces-Investment-from-KKR

[4]https://pestakeholder.org/reports/how-private-equity-gets-its-cut-from-medicare-advantage/

[5] Pitchbook, https://my.pitchbook.com/profile/61701-76/company/deals#deal-256385-71T. Accessed May 13, 2024.

[6]https://harmonycares.com/services/complete-health-assessment/

[7]https://www.prnewswire.com/news-releases/centene-sells-majority-stake-in-us-medical-management-301415017.html

[8] https://harmonycares.com/news/us-medical-management-usmm-and-its-family-of-companies-announces-rebranding-changes-name-to-harmonycares/

[9]https://www.justice.gov/usao-edmi/pr/usmm-and-vpa-pay-85-million-resolve-overpayment-medicare-claims-laboratory-and

^[10] BrightSpring Health Services, Inc. form S-1, filed with the Securities and Exchange Commission January 2, 2024. https://www.sec.gov/Archives/edgar/data/1865782/000119312524000734/d251968ds1.htm Pg. 21

[11]https://www.premiergeriatric.com/news/eventus-wholehealth-announces-acquisition-ofpremier-geriatric-solutions-LlRWb

[12]https://www.enhancedhealthcare.com/news/2019/1/8/eventus-wholehealth-announces-investment-from-enhanced-healthcare-partners-1

[13]https://oig.hhs.gov/fraud/enforcement/eventus-wholehealth-agreed-to-pay-327000-for-allegedly-violating-the-civil-monetary-penalties-law-by-submitting-claims-for-services-that-were-not-rendered-or-were-medically-unnecessary/