Value-based care physician group in Florida lands $500M in its first capital investment

Kinderhook Industries, an investment firm, has provided a $500 million investment in Physician Partners, a primary care physician group and managed service organization in Florida. 

This was the physician group’s first private capital investment. The capital will be used to open additional locations in Florida and enter at least two out of state markets this year, the firm told Fierce Healthcare. 

About a third of Kinderhook’s investments are in healthcare services, and the firm has a long-standing relationship with the Physician Partners management team. That made the opportunity “even more exciting,” Chris Michalik, managing director at Kinderhook, told Fierce Healthcare. 

Another appeal to the investment was Physician Partners’ track record of delivering high-quality performance for their payer partners. “Having healthy happy members is a good business proposition,” Michalik said, and the physician group has proved itself successful in multiple regions in a competitive Florida market.

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Physician Partners serves more than 137,000 members with more than 545 physicians. It partners with national and regional Medicare Advantage health plans in the state. Physician Partners aims to disrupt traditional healthcare through value-based care. The investment will accelerate the network’s next phase of growth.

“The beauty of the value-based care model,” Michalik said, “is that because the providers are incentivized to keep people healthy, they, therefore, are practicing preventive medicine.”

Kinderhook sees value-based care, particularly for government programs, as the superior model and the future of healthcare, Michalik said. In his view, there is less creativity in private or commercial payer markets, because those members tend not to have as many conditions or require as much care as seniors, for instance. 

“Given their success investing in the healthcare industry, particularly with a focus on value-based, risk-bearing arrangements, we believe Kinderhook is the ideal partner to support and accelerate our growth as a leading value-based primary care provider,” said Sidd Pagidipati, chairman and founder of Physician Partners, in the announcement.