PE firms aim to solve nursing shortage; path from fee-for-service to value-based care has bumps

PE firms step up investments in healthcare.

Happy Fri-yay, Hubsters! Aaron here, as per usual, to close out the week.

Healthcare heartbeat. “One of the most critical nationwide challenges we will face in the coming years will be the shortage of experienced healthcare providers, and we are doing everything we can to be part of the solution,” said Bart Valdez, CEO of PE-backed Ingenovis Health.

In April, Ingenovis Health, which is backed by Cornell Capital and Trilantic North America, acquired VISTA Staffing Solutions from Envision Physician Services.

In this edition of HH, I want to highlight the trend of PE capital flowing in the healthcare staffing solutions space. In the past month, I have had two exclusives about investments in the space, and there will no doubt be more to come.

One of those was One Equity Partners’ acquisition of PrimeTime Healthcare.

Prime Time is poised to be a consolidator in the “highly fragmented” healthcare industry, Charlie Cole, principal, OEP, told me.

“We’ve been looking at healthcare staffing for some time, because the fundamentals suggest that staffing companies will be an increasing part of the healthcare labor ecosystem,” explained Cole. “The pandemic exacerbated existing clinician shortages, and we don’t see those easing anytime soon. Take nursing – estimates suggest the US could be at an RN deficit of almost 500,000 by 2025. Moreover, shortages are not nursing-specific.”
In a story we published yesterday, I recapped some deals in the past six month that have gone to solving the staffing problem in the healthcare industry.

Read the whole story here.

From FFS to VBC. The days of fee-for-service may be over in healthcare, with the industry evolving to value-based care, but the transition is still in early innings.

The amount of financial risk providers have is going to increase significantly in the next few years.

A study done by Innovacer and Morning Consultant shows that providers don’t have the tools, analytics, and processes to know how they’re performing on risk-based contracts.
One of the sticking points of the transition from FFS to VBC is artificial intelligence to support VBC outcomes. A whopping 93 percent of the respondents say AI will not only improve clinical outcomes but also operational performance, but 68 percent said their organization does not have the AI capabilities to drive digital transformation.

There has been a lot of talk leveraging data in healthcare, and something else jumped out at me. An eye-popping 83 percent of respondents said they are only “somewhat, slightly or not at all” prepared to capture and act on consumer generated data.

You can read the survey results here.

I’m always looking for trends in healthcare, including dentistry, orthopedics, dermatology, ophthalmology or other subsectors. If you are a private equity investor in healthcare, I’d love to hear what you’re seeing out there. Feel free to reach out at

That is a wrap for me! MK Flynn will be back with the Wire on Monday.

Wishing everyone a wonderful weekend. I will be spending mine in Mystic, Connecticut, for a wedding. I hurt my knee hooping a few weeks back, but luckily it is healed enough for me to tear up the dance floor.