Miami-based Cano Health announced today the acquisition of fellow primary care provider Doctor’s Medical Center in a bid to grow its Medicare, Medicaid and Affordable Care Act (ACA) exchange memberships in South Florida.
The deal closed July 2 and ran Cano Health $300 million, $250 million of which the company said was financed by new debt.
Cano Health now controls DMC’s 18 medical centers located in Miami-Dade and Broward counties, the companies said, with 15 of these serving memberships dominated by adult and pediatric Medicaid members.
By combining with DMC, Cano Health said it will become “the largest independent value-based primary care provider to both Medicare and Medicaid patients” in the state of Florida.
“The DMC team has served the South Florida region for nearly 25 years, evolving its clinical platform to meet the diverse care needs of the community,” Marlow Hernandez, M.D., co-founder, CEO and chairman of Cano Health, said in a statement. “With DMC as part of the Cano Health family, we are bringing our care model to more patients and acquiring important footprint and infrastructure to further improve the clinical outcomes of underserved patients."
Cano Health—which just recently joined the public markets through a $4.4 billion special purpose acquisition company merger—runs value-based primary care centers and provides support to other primary care practices treating senior patients. Active in Florida, Texas, Nevada and Puerto Rico, 80% of Cano Health’s populations are minorities, and 50% are dual-eligible for Medicare and Medicaid.
This week’s deal adds roughly 7,000 Medicare Advantage members, 31,000 Medicaid members and 14,000 ACA members to Cano Health’s business, which the provider said brings its total to about 197,000 members.
Of note, Cano Health stressed in its announcement that the deal will be a boon to its standing business with Humana. By expanding its reach and incorporating DMC’s specialized Medicaid medical centers, Cano Health said it will be able to provide greater services to the payer’s Medicaid members living in Florida.
"Cano Health's focus on preventive care and wellness aligns with Humana Healthy Horizons and our 'human care' approach to serving our Medicaid members," Humana Florida Medicaid President Jocelyn Chisholm Carter said in a statement. "Teaming with Cano Health, we continue to focus on making sure our members receive the full-service health care services they need in a welcoming environment."
Cano Health’s deal comes hot on the heels of last month’s $600 million acquisition of University Health Care. That deal brought 13 Florida facilities and approximately 24,000 Medicare Advantage members under Cano Health’s purview.
Alongside news of the DMC deal, Cano Health shared new guidance on its 2021 and 2022 full-year financials.
Through the end of this year, the provider is projecting $1.5 billion in full-year revenue (an 80% year-over-year increase) and roughly $110 million in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA). It anticipates its membership to land between 205,000 and 210,000 and its total number of medical centers (currently 106) to fall between 121 and 126 facilities.
In 2022, Cano Health believes it will reach full-year revenues of $2.23 billion and adjusted EBITDA of $150 million. It’s also aiming to reach 250,000 members and 180 medical centers by the end of that year.