In the past year, ModivCare Inc. (Nasdaq: MODV) has hit the ground running in the home-based care space.
With recent acquisitions, the company is further leaning into its goal of transforming from a transportation logistics company to a provider of holistic supportive care solutions designed to address social determinants of health.
Daniel Greenleaf, the president and CEO of ModivCare, touched on his larger plans for the company during its Q2 2021 earnings call Friday.
“[We want to] remove barriers to care for underserved patient populations, deliver better care in the home, enhance patient lives and health outcomes, provide a convenient one-stop-shop for our payers, state and hospital partners,” he said. “And reduce health care costs.”
A key strategy for cementing this vision has been the company’s acquisitions of both CareFinders Total Care LLC and VRI Intermediate Holdings LLC.
Based in Denver, ModivCare offers technology-enabled health care services and provides non-emergency medical transportation (NEMT), personal care and nutritional meal delivery services.
In July, ModivCare announced its plans to purchase CareFinders, a Hackensack, New Jersey-based personal care company that serves more than 8,500 patients throughout New Jersey, Pennsylvania and Connecticut. The transaction is slated to close in 2021’s third quarter.
Under the terms of the agreement, ModivCare will acquire 100% of the equity interest in CareFinders for $340 million. ModivCare’s personal care segment will consist of almost 16,000 caregivers working across seven states upon completion of the transaction.
More recently, ModivCare penned an agreement to acquire VRI, a Franklin, Ohio-based provider of remote patient monitoring solutions.
Under the deal, ModivCare will acquire 100% of VRI for $315 million. This is subject to customary purchase price adjustments.
“With the combination of VRI’s in-home remote monitoring insights and ModivCare’s existing data from our other supportive care verticals, we’ll further unlock the total health picture of patients and enable improved health outcomes,” Greenleaf said.
The acquisition of VRI adds an estimated $8.5 billion dollar addressable market in remote monitoring, which is only 13% penetrated, according to ModivCare. There are considerable growth opportunities in this space due to increasing coverage of remote monitoring by Medicaid and Medicare Advantage health plans, Greenleaf said.
Originally, ModivCare marked its debut into the personal care space with its acquisition of Simplura in November 2020. The acquisition was an all-cash transaction that placed an enterprise value of $575 million on Simplura.
Prior to the deal, Simplura operated a network of home health and personal care agencies across seven states. ModivCare still delivers those services under the Simplura name.
“Simplura’s scale and density in its core markets provided us with an excellent foundational business in the $55 billion personal care sector, which is expected to grow to $100 billion over the next several years,” Greenleaf said. “Our pending acquisition of CareFinders, announced last week, significantly strengthens our personal care presence in the Northeast and complements Simplura’s capabilities.”
In addition to recent M&A activity, ModivCare announced on Thursday that it is teaming up with Uber Health to strengthen its networks of transportation providers.
Greenleaf believes that the “synergistic ecosystem” ModivCare has created is poised to thrive as health care increasingly shifts away from higher-cost institutional settings to lower-cost home settings.
“While leveraging our data analytics and technology, we envision a future in which our personal care aides serve as the air traffic controllers in the patient’s home,” he said. “If the patient’s food stock is meager, the aide can call on our nutritional meal delivery program. If the patient’s required medication is in short supply, the aide can deploy our NEMT services to transport replenishments to the patient’s home. If the aide notices a special need for medication management or remote monitoring, we can bring VRI solutions into the patient’s home.”
During the call, Greenleaf also took time to applaud policymakers’ support of home- and community-based services. Specifically, the “Better Care Better Jobs Act,” which is sponsored by U.S. Sens. Bob Casey of Pennsylvania and Ron Wyden of Oregon, in addition to U.S. Rep. Debbie Dingell of Michigan.
“This vital investment, if passed into law, could help seniors and people with disabilities access needed support and put the family caregivers back to work,” he said.
In total, ModivCare reported revenue of $474.4 million in Q2 2021, a 68.1% increase compared to $282.3 million during the same period last year.
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