Goldman Sachs, Charlesbank Acquire Widespread Primary Care Network

As private equity investment in healthcare continues to soar, Goldman Sachs and Charlesbank have scooped up a sprawling primary care network with a unique business model.

Boca Raton-based MDVIP — which consists of 1,100 physicians in 44 states and the District of Columbia who serve more than 360,000 patients — announced late last week that the private equity business of Goldman Sachs Asset Management and funds affiliated with Charlesbank Capital Partners have completed an acquisition of the company from Leonard Green & Partners and Summit Partners for an undisclosed sum.

“MDVIP has differentiated itself with a proven model, national footprint, reputation, and patient satisfaction scores that exceed healthcare industry benchmarks. We are excited to collaborate with Charlesbank and the MDVIP management team to build on the company’s leadership and strengths in primary care,” said Jo Natauri, partner and global head of private healthcare investing at Goldman Sachs Asset Management, in a statement.

Brandon White, managing director at Charlesbank Capital Partners, added that the company “has developed a highly successful business model with multiple avenues for growth, and we look forward to supporting their continued momentum.”

Founded in 2000, MDVIP offers a membership-based primary care model. However, the aim is for doctors to maintain smaller practices to spend more time with patients and provide more individualized care, according to the company. The maximum number of patients in an MDVIP practice is 600. Annual membership averages $1,650 to $1,800, which can be paid quarterly, semi-annually, or annually.

MDVIP Chair and CEO Bret Jorgensen explained to MedPage Today that 100% of MDVIP’s revenue (which the company does not disclose) is consumer-funded. Though the company’s customers pay out of pocket for services, all of them are insured, about half through Medicare and half through commercial insurance.

The annual member fee is for a wellness program, a yearly health assessment that includes advanced diagnostic tests and screenings, according to the company. The screenings and subsequent physician counseling focus on heart and respiratory health, emotional well-being, diabetes risk, hearing and vision, sexual health, weight management, and bone health, among other areas.

“The doctors know the patients incredibly well … and then help them manage their health goals throughout the year,” Jorgensen said. The model also works well for physicians who are looking to be a “little less on the treadmill” when it comes to high-volume medicine, he added.

Of MDVIP’s 1,100 physicians, just about 1% are employed by the company itself, he noted. About 150 are employed by health systems, hospitals, or large groups, and the remainder are independent or with small groups.

MDVIP does not own any physician office space, and most of its network physicians rent their facilities, he said.

MDVIP has been private equity-owned since 2014, and Jorgensen said that the latest transaction will not have any impact on its physician network or the provision of care. “Our business is not broken in any way,” he added.

In terms of timing, the transaction was a planned recapitalization of the business; it was expected in a 4- to 5-year window, and is happening at about the 4-year mark. The “market was strong” and the “performance was strong,” Jorgensen noted. The efforts were led by Goldman Sachs.

Jorgensen said the transaction is expected to add additional resources and opportunities to broaden the company’s footprint through direct-to-consumer and other marketing efforts, and to expand its dealings with health system and hospital partners.

Neither Goldman Sachs nor Charlesbank immediately provided further comment on the transaction. Sellers Leonard Green & Partners and Summit Partners also did not immediately respond to a request for comment.