Waud partners with ex-CenseoHealth execs, launching new healthcare platform

Joining forces with Bales Nelson and Allen Dye, Waud will consider tech-enabled opportunities to invest behind the staffing needs of multiple end-markets, sites of care and customer bases.

Chris Graber
Chris Graber, partner at Waud Capital.

Waud Capital Partners has set out to build a new technology-enabled healthcare services and staffing company by teaming up with Bales Nelson and Allen Dye – two longtime healthcare executives, most recently of CenseoHealth.

The Chicago-based private equity firm has committed $100 million of initial equity capital to support the initiative, although it has a flexible mandate. Partner Chris Graber told PE Hub that Waud is prepared to start with something of true scale to which it would be able to allocate significantly more capital or, alternatively, with a relatively smaller business that has a high-quality technology program.

The initiative will consider opportunities to invest behind a range of niche and broader physician staffing needs, as well as those of ancillary staff such as aides, nurses or therapists. “Healthcare staffing needs cross over multiple end-markets and sites of care and customer bases – so that could be hospitals, post-acute facilities, home-care,” Graber said.

While capitalizing on both organic and M&A growth avenues, technology will be a critical component of the strategy. “The healthcare market is slow to adopt technology and embrace technology, and this [healthcare staffing] is one example of that,” Graber said. In light of the pandemic, “those organizations that have invested in the technology backbone are able to deliver services better, faster, more efficiently – and are able to grow disproportionately.”

In many ways, what CenseoHealth built and what that ultimately became as part of Signify Health, is viewed as a perfect case study for an organization that leaned into those technology investments, Graber said.

Nelson and Dye most recently worked together at CenseoHealth, helping transform and grow the tech-enabled health risk assessments business more than two-fold before an eventual exit in December 2017. CenseoHealth ultimately merged with Advance Health as the pair of businesses were jointly recapitalized by New Mountain Capital. The combined company, Signify Health, went public this year with a market capitalization north of $7 billion.

“Technology is ripe with opportunity to utilize some of the things we did at Censeo to scale, and subsequently at Signify,” said Dye, who was chief operating officer, head of business development and, ultimately, chief growth officer at CenseoHealth. Nelson, president and founder of CenseoHealth, originally worked alongside Dye at physician staffing business Merritt Hawkins and, upon its acquisition, AMN Healthcare.

One key component of CenseoHealth’s technology strategy, Dye said, was an effort to replicate a well-functioning provider’s office – where each individual is focused on what they need to be doing. By bringing that to the Medicare Advantage risk-adjustment setting, in which there might be only one in-home visit a year, technology was used to improve care delivery by supporting intelligent routing or access to patients’ medical history, for example.

“Have physicians diagnose, have coders code, but make it seamless,” Dye said. “Cutting out the waste that is really just there because it has always been there – because the technology hadn’t caught up with it yet – that’s really is what we tried to do and what we’ll do again.”

In staffing specifically, Graber said he is now observing more technologies that are able to more quickly plug into provider groups and connect with a network of labor and personnel – all the while collecting information, evaluating the quality of the people and the ultimate service provided to that end customer, or patient.

“You see more technology out there, you see more connectivity among different constituents, and you also see a very different environment as people think about the ‘gig economy’ in terms of what the opportunity is,” Graber said.

Waud, a growth-oriented mid-market firm, has investment experience in healthcare, healthcare IT and technology. Its existing portfolio includes Integrated Practice Solutions, Sphere, Health & Safety Institute, Pharmacy Partners and Concierge Home Care.