It appears some health care companies are still opting to go public the old-fashioned way.
Signify Health — a value-based care platform that uses advanced analytics and other technology to shift health services toward the home — filed an S-1 on Tuesday, indicating its intention of going public. The move comes roughly a year and a half after the Dallas-based company merged with Remedy Partners.
While Signify has signaled its plans to go public with the U.S. Securities and Exchange Commission (SEC), it has not yet determined the number of shares to be offered or the price range for the proposed offering.
The data-driven platform — looking to raise up to $100 million in its IPO — is a portfolio company of New York City-based PE firm New Mountain Capital.
“Our customers include health plans, governments, employers, health systems and physician groups,” Signify’s S-1 explains. “We believe that we are a market leader in two fast-growing segments of the value-based health care payment industry: payment models based on individual episodes of care and in-home health evaluations.”
The overarching goal of Signify is to support value-based payment programs by aligning financial incentives around outcomes. As part of that mission, the platform provides tools to its customers designed to assess and manage risk while identifying “actionable opportunities for improved patient outcomes, coordination and cost-savings.”
Signify currently serves 47 Medicare Advantage plans, ranging from the largest national organizations to smaller regional and provider-owned entities.
Its episode payment platform managed $6.1 billion of spend under the Medicare Bundled Payment for Care Improvement Advanced (BPCI-A) program in 2019, according to the S-1. The BPCI-A episodes Signify managed that were started in the final quarter of 2019 resulted in roughly 15% more discharges home from acute-care facilities, in addition to about 10% lower readmissions compared to historical performance.
Signify Health is the largest convener participant in BPCI-A by number of episodes managed.
“As a result of both the success and visibility of the BPCI-A program, commercial health plans, governments and employers are beginning to explore similar bundled arrangements,” the S-1 continues. “As a scaled leader in the industry, we believe we are a compelling partner to support these initiatives and believe we will benefit from a network effect as health plans and providers look to further capitalize on the benefits of value-based care.”
Investing around “the home” and social determinants of health has been a key part of Signify’s success. From 2015 to 2019, the platform increased the number of annual in-home health evaluations conducted from about 390,000 to nearly 1.1 million.
To deliver those evaluations and related services in the home, Signify works with a network of nearly 9,000 credentialed providers.
“We believe patients achieve optimal health outcomes when all clinical and social factors influencing their health and recovery from specific events are addressed,” the S-1 states. “We rely, therefore, on a holistic model of care in how we operate all our programs.”
The COVID-19 pandemic “significantly” impacted Signify’s in-home health evaluations starting in March of last year, with many of its customers delaying in-person services. The platform quickly halted its normal evaluations as a precautionary measure, making up lost volume through a virtual version of its core services.
It resumed its traditional in-home health evaluations — referred to as “IHEs” in Tuesday’s SEC filing — in July.
“Although we have seen some increase in IHE member cancellation rates in part as a result of the pandemic, overall we saw significant incremental IHE volumes in the second half of 2020 … ,” the S-1 reads. “In order to meet this volume growth, we have onboarded additional providers into our network, which has resulted in proportionally higher expenses.”
Signify’s total revenue was $501.8 million for the year ended Dec. 31, 2019, according to the S-1. For the nine months ended Sept. 30, 2020, its total revenue was $417.1 million.
“We believe our financial model is attractive with highly recurring revenues, strong EBITDA margins and high cash-flow conversion,” the SEC filing notes.
Signify Health intends to list its Class A common stock on the New York Stock Exchange under the ticker symbol “SGFY.”
Goldman Sachs, J.P. Morgan, Barclays and Deutsche Bank Securities are acting as lead bookrunner agents for the proposed offering. BofA Securities, UBS Investment Bank, Baird, Piper Sandler and William Blair are acting as additional bookrunners.
Most recently, Home Health Care News connected with Signify in September to discuss a new partnership with Independence Blue Cross in Philadelphia.
The aim of the partnership is to break down the biggest barriers between social and clinical care, Signify’s chief strategy officer, Nathan Goldstein, told HHCN.
“Because at-risk patients have clinical comorbidities and social comorbidities that exacerbate them, we need to bring the same effort to coordinate the social care that we do with the clinical care,” Goldstein said at the time.
Signify’s IPO bucks one of the biggest trends in health care of late, as multiple companies have chosen to go public via the special-purpose acquisition company (SPAC) route. Senior Connect Acquisition Corp. is just one prominent example of that trend.