Primary Care Companies Are Aggressively Expanding in North America

Primary care companies, such as Skylight Health Group Inc. (TSXV:SHG)(OTCQX:SHGFF), Oak Street Health Inc. (NYSE:OSH), WELL Health Technologies Corp. (TSX:WELL)(OTC:WLYYF), 1Life Healthcare Inc. (NASDAQ:ONEM), and Jack Nathan Medical Corp. (TSXV:JNH) are quickly expanding throughout North America.

Even Amazon is opening health centers in five states to provide primary care to employees. “The goal of the health centers is to lower the cost of healthcare by encouraging employees and their family members to go to the centers for primary care instead of more expensive emergency rooms or urgent care centers,” reports Becker’s Hospital Review. Oak Street Health just announced it opened another center in Brooklyn, New York. Jack Nathan Medical Corp. also just announced the acquisition of four operational medical clinics, in Ontario.

After all, “Primary care is critical to maintaining health and caring for chronic illness. The U.S. system sorely lacks adequate primary care, which reduces the quality and increases the cost of care. Part of the solution is increasing the compensation of primary care providers,” as noted by Harvard Business Review. To help address the need, multi-specialty health companies are stepping in to help lower healthcare spending, and improve health outcomes.

Look at Skylight Health Group Inc. (TSXV:SHG)(OTCQX:SHGFF) for example

Skylight Health Group Inc. (TSXV:SHG; OTCQX: SHGFF), one of the largest multi-specialty healthcare systems in the United States, just announced that, further to its press release dated January 7, 2021, it has completed the deal to acquire Rocky Mountain Urgent Care & Family Medicine clinics in Colorado.

Acquisition highlights:

- 6 locations in the Denver and Boulder areas

- 2020 unaudited revenue of $20M and adjusted EBITDA of $3M

- Immediately accretive deal strengthens organizational team with a robust, centralized corporate infrastructure

- Skylight Health forecasted annual revenue run rate now over $56M with $100M in acquisition pipeline

“I am pleased that Skylight Health has closed on this transformative acquisition,” says Prad Sekar, Co-Founder and CEO of Skylight Health. “Not only does it add immediate incremental revenue and strengthen market share within an existing state, it also builds upon the infrastructure to support Skylight’s national network of clinics and further growth. We have spent the first quarter of 2021 strengthening our leadership team with strategic hires that we can lean on, and learn from, as we grow aggressively both organically and through acquisition for the remainder of the year.”

Rocky Mountain Group has been operating an established and fast-growing network of primary care clinics. The group is actively credentialed with major insurance carriers. Aligned with SHG’s multi-disciplinary strategy, Rocky Mountain employs a multi-disciplinary approach to patient care management. Rocky Mountain’s clinical staff mix includes physicians, nurse practitioners, and physician assistants.

Rocky Mountain Group adds immediate incremental revenue to SHG as it strengthens its market share within an existing state, as well as builds upon the infrastructure to support SHG’s national network of clinics and further growth. Rocky Mountain Group has built a sustainable and scalable corporate infrastructure including in-house revenue cycle management, credentialing, centralized scheduling, compliance, and medical leadership. Rocky Mountain leadership team and clinical staff remain in place post-acquisition.

Other related developments from around the markets include:

Oak Street Health Inc., a network of value-based primary care centers for adults on Medicare, is expanding access to more older adults in New York with the opening of its second center in Brooklyn located at 8923 Flatlands Avenue. The new center joins an existing Brooklyn center on Sutter Avenue that opened in October 2020. ​“We are excited to expand access to our high-quality, value-based care to members of the Brooklyn community with the opening of this new center,” said Dr. Ramon Jacobs-Shaw, Senior Medical Director at Oak Street Health. ​“The majority of older adults we care for have two or more chronic conditions, making this kind of care so important. As our organization continues its mission to rebuild healthcare as it should be, we look forward to improving patient outcomes in New York and helping older adults live their healthiest lives.”

WELL Health Technologies Corp., a company focused on consolidating and modernizing clinical and digital assets within the primary healthcare sector, announced its fiscal fourth quarter and annual financial results for the three and twelve months ended December 31, 2020.  Hamed Shahbazi, Chairman and CEO of WELL commented, “Q4-2020 was another great quarter for WELL in which we achieved record quarterly revenue and gross profit, but I am most pleased to report that we achieved a significant milestone in the fourth quarter with this being the first time that we’ve reported positive Adjusted EBITDA(2) which exceeded analysts’ predictions.  We have proven that our capital allocation model works and moving forward, we are only expecting profitability and cash flows to grow.  During Q4 we also completed seven transactions and that pace has continued into Q1 with a number of completed and announced transactions, including the proposed acquisition of CRH Medical.”

1Life Healthcare Inc. announced financial results for the fourth quarter and full year ended December 31, 2020. “At One Medical we are advancing on our vision to delight our communities, our members, and our enterprise clients with better health and better care, while reducing costs,” said Amir Dan Rubin, Chair & CEO of One Medical. “We have continued to see our human-centered and technology-powered model deliver impacts at scale--expanding to serve 549,000 members and more than 8,000 employer clients, and enabling more than 5 million digital and in-person interactions during 2020. Our continued momentum is further reflected in our financial results, with full year 2020 net revenue of $380 million up 38% year-over-year.”

Jack Nathan Medical Corp., a provider of primary care medical clinics located in Walmart Supercentres under the Jack Nathan Health brand, announced the acquisition of four operational medical clinics, in Ontario, previously owned and operated by medical partner and Advisory Board member Dr. Hamilton Jeyaraj, and located inside Walmart stores in Ontario. This is a significant milestone and represents the opportunity to further entrench Jack Nathan Health as a provider of accessible healthcare for an increasing range of needs. By further building out its ecosystem of corporate-owned and managed operations and allied services with these four clinics, Jack Nathan Health is creating benefits for practitioners and patients alike. In addition, it represents an annualized increase of approximately 50% of current revenue and reflects the Company’s plans to generate revenue growth and create shareholder value through clinic acquisitions and operations inside the Walmart footprint.

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