Inside Baseball – June 2014
Volume 11 - Edition 48
by: Molly Cate | posted June 3, 2014
Drafts & Trades
Avondale Partners scored big with the recent hires of Donald Ellis, the rock-star-like pharmaceutical analyst recruited from the West Coast and Jim Braniff, a sales trader who joined the firm’s growing NYC office (opened in the last year) from Needham & Co. Also within the past year Rob Tyndall has joined Avondale’s investment banking group as a managing director. Tyndall who comes out of Brookwood Associates in Charlotte and Bain Capital is in the process of relocating to Nashville.
Founded in 2001 after the infamous J.C. Bradford sale (you old-schoolers will remember the significance of this) and the merger of SunTrust/Equitable Securities, six execs (Steve Riven, Pat Shepherd, Rich Henderson, Phil Krebs, Raymond Pirtle and Jeff Nahley) launched Avondale as Nashville’s next independent investment banking firm offering trading, research, wealth management, etc. After all, Music City was without one.
Over the years, Avondale has grown some of the city’s top talent. For example, with a rich concentration of healthcare knowledge and close proximity to the players Nashville’s healthcare equity research scene is growing.
One of the more interesting newcomers that caught our eye via a healthcare innovation conference is Obsidian Research Group (ironically launched by Avondale alums Kurt Riemenschneider, Toby Wann and Emily Evans). Solely focused on healthcare (is there anything else in Nashville, really?), Obsidian differentiates itself by a sharp focus on policy and regulatory research (Evans’ background is in politics) coming out of the nation’s capital.
Recall former Jefferies healthcare analyst Arthur Henderson, who, seeing a similar trend, launched Harpeth Research Group. Henderson has landed at the state as portfolio manager for Tennessee’s retirement fund. No pressure, really.
Former Vanguard exec Devin Carty has landed at Cancer Treatment Centers of America (you know the infomercials) as Chief Strategy Officer and Chief Talent Officer. At Vanguard, Carty served in multiple interesting roles, including VP of Culture, Chief Marketing Officer and Chief Experience Officer. The healthcare IT marketing start-up he co-founded with MoonToast execs Daniel Hightower and Marcus Whitney, Clariture Health, recently landed $1 million in capital from The Martin Companies, and established dual headquarters in San Fran and Nashvegas.
Speaking of former Vanguard execs, Tim Petrikin, who served as EVP of Ambulatory Care Services at the hospital company, is raising money for an interesting new company named Ampersand Health. Focused on the primary care conundrum (that simple, yet universally agreed-upon broken piece of the nation’s healthcare system that costs billions in the long run), Ampersand wants to build primary care team clinics in partnership with health plans and capture value via their risk contracts. While at Vanguard, which had a penchant for innovation and new models of care, Petrikin oversaw a similar effort for the company’s six health plans and five ACOs through an ops team led by Andrea Kampine that was recruited from HealthSpring and the Southcentral Foundation in Alaska (both of which have highly regarded models).
Joining Petrikin at Ampersand is Lang Aston. The two worked together at e+CancerCare, a company that Petrikin started and led prior to going to Vanguard. Aston was CFO of the company. Prior to that, he was an investment banker for Stephens Inc. and Lehman Brothers. … Sounds like a good person to put in charge of the money.
In the same vein of smart people displaced by recent mega-hospital mergers, MaryAnn Hodge, the former VP of marketing and communications for HMA, is back in town. Hodge was tapped to lead marketing and communications for Parallon, the growing HCA subsidiary that provides business and operational services to hospitals across the U.S., U.K., Mexico and China. Prior to HMA, Hodge was at Community Health Systems and HCA.
Former FTI exec Iain Briggs has landed at consulting firm Spectrum Health Partners, where he’ll develop the company’s non-profit and municipalities book of hospital business. Briggs was with Cambio Health Solutions (another old-schooler reference) prior to FTI’s purchase. Spectrum offers interim management and financial advisory services for primarily the investor-owned world. (CHS is listed as one of the firm’s clients.) Kenneth Doran and William Moore are the main principals of the company.
From the Dugout
Nashville healthcare’s new guard of entrepreneurs is focused on the collective question, “How can we make the industry work better?” Consistently, their answer involves technology and data.
One of those entrepreneurs is Dan Hogan, a recent speaker at Nashville’s TEDx forum and former home health agency owner who’s actively raising capital for a company he created more than five years ago, Medalogix.
A predictive modeling company focused on post-acute care (one of healthcare’s messiest, least organized and most expensive sectors), Medalogix’s product equips caregivers with analytic-based information (probabilities, patient mortality risk, treatment venue guidance) to help them craft care plans for patients.
We recently sat down with Hogan to talk about his company, the use of data (or lack thereof) in post-acute care and his experience in Nashville.
Q: What’s driving your capital raise?
A: Growth. Last year alone, we grew our client base by four times. To add to that, we’re now getting inquiries from outside the home care and hospice verticals. Areas like skilled nursing, inpatient rehab and acute care all see a need for our unique approach to risk assessment and clinical workflow. So, we’re raising capital to build out those offerings, while also broadening our existing support capabilities.
Q: Your Ted talk focused on an emotional topic: end-of-life care. How does a post-acute care business deal with the reality that emotions often drive these decisions, not data?
A: I’ve come to realize that emotions are the fundamental driver for ALL decisions, and data plays a role in informing that process. Specifically, how that applies to our work is this: The analytics we build are designed to inform a review process that very heavily relies upon the relationship – the experience, intuition and emotions at play – between patient and caregiver.
As advanced as our tools are, you can’t yet measure willpower, determination or optimism with an algorithm. The fact is, ALL of those emotional realities do play a big part in the probability of an outcome for a patient. Nurses and doctors fill in those gaps … and they do it rather well, I might add.
Q: The post-acute care space is notorious for being behind the rest of the industry. Historically, what has stopped this sector from embracing technology, data and other innovation?
Traditionally, home care has been a mom-and-pop, small-business-driven segment of our nation’s delivery system. And, it’s also been low cost. Combined, those two things have defined home care as a less-than-fertile market on which to focus for vendors that build sophisticated technological tools.
But, that has changed. Nowadays home care providers are growing more technologically advanced. We’ve seen a huge acceleration of the deployment of technology on both the clinical and administrative sides of these organizations. Because of that, we’ve seen a corresponding improvement in outcomes for a variety of conditions. In many cases, these are better outcomes than the hospital sector.
Q: What do you think will change that for good?
In my opinion, the broad-scale reinvention of our healthcare system has already changed that for good. I expect to see bigger, more sophisticated, national home care organizations arise out of an extended period of consolidation that’s already underway.
And, I expect a reformation of the home care payment structures to include some form of bundled reimbursement that’s consistent with the acute care space.
Q: What’s been your biggest surprise about raising money in Nashville?
Well, I haven’t really raised money in Nashville. We’ve deliberately chosen to focus our fundraising efforts elsewhere because we’ve seen a lot of “slanted deals” coming out of the venture community here.
Here’s what I mean by that: As a startup, you want to create some level of competitive interest and foster competing term sheets. This allows you to drive investment, while also maintaining equity and shareholder value for the truly early participants, founders and angels.
In Nashville, there’s a very collegial community of early-stage investors who have proven to be reluctant to bid against one another. This is extremely disadvantageous to the early stakeholders in any startup enterprise.