Bain Bets on Skilled Nursing with Acquisition of Medical Provider HealthDrive

A subsidiary of Bain Capital made a major move into the skilled nursing world this week, acquiring a provider of specialty medical services to heavy hitters like Genesis Healthcare (NYSE: GEN) and HCR ManorCare.

Bain Capital Double Impact on Thursday announced the acquisition of HealthDrive, a Wellesley, Mass.-based firm that offers dentistry, optometry, podiatry, and other medical services to residents of skilled nursing and assisted living properties.

Bain bought HealthDrive from the Boston-based private equity firm Riverside Partners. The terms of the deal were not disclosed.


Skilled nursing facilities account for about 85% to 90% of the clients in HealthDrive’s portfolio, CEO Dan Baker told SNN, with a roster that includes Genesis, ManorCare, Senior Care Centers, and FutureCare. The firm operates in about 1,800 skilled nursing locations across the country, with the remainder of revenues coming from assisted living chains such as Sunrise, Brookdale, and Atria, Baker said.

While the current reimbursement landscape for Medicare Part A, which covers skilled nursing services, remains in a state of upheaval, Baker noted that the company derives the majority of its revenue from Part B. With a more stable outlook for Part B than A in 2019, Baker and Bain Capital Double Impact managing director Peter Spring see only growth ahead for the business model.

“It is able to provide these services in a very cost-effective manner, and in many cases, to patients who weren’t receiving the care otherwise,” Spring said of HealthDrive’s business model. “The vast majority of their revenue is derived from other third-party payers. So they are not relying on the skilled nursing homes for reimbursement for these services. And so it’s a way to provide care to these patients but not to be an additional strain on the skilled nursing centers.”


Part B reimbursements generate about 40% to 50% of HealthDrive’s total revenues, according to Baker, with Medicaid covering 10% to 15%, managed Medicare and Medicaid plans accounting for 15% to 20%, and private payors covering the rest.

But the ongoing changes in Medicare Part A reimbursements also present opportunity for HealthDrive and other providers of ancillary services in skilled nursing facilities. With alternative payment models placing a greater financial emphasis on reducing readmissions, Baker said he sees potential in working with SNFs to treat certain common medical issues on site, before they develop into more serious problems that require a hospital stay — and a potential penalty under any number of new payment schemes from the Centers for Medicare & Medicaid Services (CMS).

“As we move forward in looking at bundled payments that are coming from skilled nursing facilities, and just this overall trend towards outcome-based reimbursement, we’re excited about those types of trends,” Baker said. “We think that in the future, that may develop into an opportunity for us.”

The Boston-based Bain Capital Double Impact, which has a specific focus on investments with both financial and public benefits, last year made a splash in the long-term health world by combining a pair of regional home health providers — Arosa and LivHome — into a single national player. And with the backing of global capital provider Bain, with around $105 billion in total assets, the subsidiary has plans to expand further into the long-term health care space.

“There’s no question: The aging population demographics are going to put even more emphasis on the sector, and we’ll be pretty broadly active across all different facets of the industry, looking for ways to make investments,” Spring said. “And, certainly, ways in which we can provide new business models that improve the quality of care for patients is going to be our focus area.”

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