‘We’re a Strong Alternative to Nursing Homes’: PACE Giant InnovAge Executes $350M IPO

InnovAge (Nasdaq: INNV), a Program of All-Inclusive Care for Elderly (PACE) provider, officially went public Thursday.

Denver-based InnovAge offers one of the largest PACE programs in the U.S. The company has about 1,900 employees and serves 6,600 seniors in Colorado, New Mexico, California, Pennsylvania and Virginia.

In addition to its PACE offerings, InnovAge owns two senior housing communities in the Denver area.


The company’s initial public offering resulted in a price of $21 per share, enabling InnovAge to raise $350 million by offering 16.7 million shares. The company originally planned to offer its shares at $17 to $19, but then saw its price rise on Wednesday.

“We’re responsible for paying and caring for the health care needs of all of our frail seniors … and keeping them in their own homes safely for as long as possible,” InnovAge CEO Maureen Hewitt told Home Health Care News. “And when you’re looking at PACE, government payers on the Medicaid side save approximately 13% with it compared to a similar population under Medicaid. So that’s really key.”

InnovAge goes public at a time when the market opportunity for PACE grows bigger by the day.


There are over 2 million people in the U.S. who qualify for PACE, yet only 55,000 of them participate in the model. The company already serves about 12% of PACE participants, but growing the PACE pool in general is a better way to grow the business long term.

Broadly, PACE provides comprehensive medical and social services to generally frail seniors as an alternative to nursing home care. There are currently 138 PACE programs and 272 PACE centers in 31 states, according to the National PACE Association.

Theoretically, that PACE-eligible population — anyone over 55 that qualifies for nursing home care — could be widely expanded with added PACE programs in more communities.

Due to COVID-19, InnovAge’s entry to the public space also comes at a time when seniors are readjusting their thinking on nursing homes because of the complications they faced during the public health emergency.

At least 170,000 nursing home residents have died of COVID-19, according to a running total from Kaiser Family Foundation. That total includes nursing homes and other facility-based long-term care settings.

PACE traditionally provides a wide range of offerings like adult day care, home care, nutritional support and emergency care, among other services, through interdisciplinary provider teams in the community.

Because of COVID-19, however, programs needed to rethink the way they served seniors in the community.

“With COVID, we were able to really take this model and demonstrate its flexibility to go from a center-based model into people’s homes,” Hewitt said. “We redeployed all of our staff into the homes to give care, and then we augmented that with telehealth.”

Over the last 11 months, InnovAge provided about 77,000 telehealth visits, she added.

“If you think about what PACE does and what we provide, we’re really a strong alternative to nursing home care,” Hewitt said.

Going public will help InnovAge in more ways than just one, Hewitt noted.

“I think the IPO is notable in a couple ways,” Hewitt said. “One is that it increases capital. And the second piece has to do with awareness. I mean, this program has been around for many years, and now is the time for PACE to really be that household word for the alternative to nursing home care for that for that patient, and I think this is really going to help.”

According to its IPO, InnovAge’s total revenue was over $567 million in 2020. More than 90% of that came from dual-eligible patients.

“We’re really just focused on the growth of the program, both on a state and national level,” Hewitt said. “And also looking at the number of seniors that are available to come into the program.”

InnovAge is backed by private equity powerhouse Welsh, Carson, Anderson & Stowe (WCAS), which invested in the PACE provider in 2016, selling a stake to Apax Partners in July 2020. WCAS will own approximately 87% of InnovAge’s common stock after the IPO, or 86% if the underwriters’ option to purchase additional shares is exercised in full.

Companies featured in this article: