Home-Focused Payment Innovator Signify Health Valued at $7.12B in Market Debut

It’s fair to say that Signify Health (NYSE: SGFY) — a value-based care platform that strives to shift care into the home — has had a successful stock market debut.

The momentum reflects the increasingly prominent role that in-home care is playing, particularly within value-based care conversations.

Dallas-based Signify Health, a New Mountain Capital portfolio company, filed the paperwork for going public in mid-January. On Thursday, Signify’s first day being listed on the New York Stock Exchange, the company’s saw its shares jump by more than 33%, giving it a market capitalization of $7.12 billion.

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Shares of Signify stock were initially priced at $24 as of Wednesday night. They opened at $32 on Thursday.

Peter Boumenot, chief product officer for Signify Health, told Home Health Care News that the IPO is a major benchmark for companies focused on advancing the health care sector’s transition to value-based care.

“Today, I think we’re all super excited,” Boumenot said. “It’s a great reflection of the trust and faith that New Mountain Capital, our primary sponsor, had in Signify over the past couple of years. And I think it’s also a testament to all the employees and the hard work we’ve been doing, in terms of coordinating care on behalf of health plans and health system clients.”

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As a company, Signify works with health plans and systems to support value-based payment by aligning financial incentives around outcomes. Part of Signify’s business model includes leveraging its data infrastructure and its network of roughly 9,000 credentialed providers located across the U.S.

“Activating the home as a key part of the care continuum” is also a core component of what Signify does, Boumenot added.

“I think it comes down to our vision and mission, which is to drive more healthy, happy days at home,” he said. “Not only are we in the home physically, face-to-face with individuals, but we’re also now [present] via telehealth. That’s a new service we launched over the course of the pandemic.”

All sorts of health care organizations have put their chips on the home since last spring. In reality, though, Signify’s bet on the home began long before the COVID-19 pandemic.

In 2015, for instance, Signify and its team completed about 390,000 annual in-home health evaluations. That figure jumped to nearly 1.1 million evaluations by 2019 — and about 1.4 million last year.

“The in-home health evaluation is important, but it’s also everything else that we’re able to observe and do,” Boumenot explained. “Whether it’s bringing advanced diagnostics into the home today to do early detection around things like peripheral artery disease or diabetic eye exams, or partnering with community-based organizations … to reach out and help close gaps around social determinants of health while members are still in the home.”

An example of Signify’s focus on social determinants of health includes its “CommunityLink” partnership with Independence Blue Cross.

Signify serves 47 Medicare Advantage plans, ranging from the largest national organizations to smaller regional and provider-owned entities, according to its S-1 filings from January. Among its broad customer base is Humana (NYSE: HUM), Optum, Aetna, Oak Street Health (NYSE: OSH) and the state of Connecticut, plus several others.

The company additionally touts itself as the largest convener participant in the Medicare Bundled Payment for Care Improvement Advanced (BPCI-A) program by number of episodes managed. It managed $6.1 billion in BPCI-A spend in 2019.

As a nation, there’s still plenty of progress to be made on the value-based care front. Currently, less than 20% of Medicare spending is value-based, according to professional liability insurer Coverys.

Within that estimated 20% or so of value-based payment, in-home care has been critical to lowering the overall spend. A 2020 Avalere analysis confirmed that Medicare fee-for-service patients receiving home-based care services experienced a clear decrease in Medicare spending over time when compared to a statistically balanced, matched control group that did not receive such services.

Looking ahead, Signify plans to use its strong market entry to invest back into the platform while exploring strategic M&A opportunities, Boumenot said.

“Obviously going public allows us to continue to invest in the business,” he said. “We’ve looked to continue to grow strategically. I think being in the public market now allows us to do that. But we also want to grow in the right way, so that’s a key part of what we’re looking to do as far as complementing our current business and any future expansion strategies.”

Also of note: Signify Health’s CEO, Kyle Armbrester, now joins the ranks of the youngest CEOs to ever take a company public. He holds that distinction along with the likes of 31-year-old Bumble CEO Whitney Wolfe Herde, whose company similarly went public on Thursday.