Dr. Mark Prather, CEO of home healthcare provider DispatchHealth, said its recent funding infusion of more than $330 million will likely be its final private round.
The round, announced last week, will allow Dispatch to enhance service offerings in each of the Denver-based company’s 34 states plus the District of Columbia, Prather said.
“The timing was right for us,” Prather said. “Even if the economics of the next 12 to 24 months look a little messy, Dispatch would be on the other side of that.”
DispatchHealth works with providers to bring certain services and follow-up appointment into the home. Prather said each of the company’s markets across 23 states and Washington D.C. are in varying stages of maturity. A portion of the capital infusion will go to offering each of the company’s services in these markets, he said.
“This has never been done, no one has ever created a distributed health system across states,” Prather said. While he said entering new markets would be possible, that wasn’t the focus.
In addition to deepening market engagement, Prather said the company will further its technology investments and look for ways to beef up ancillary services.
“We will be opportunistic and continue to look for services that will further enable Dispatch,” Prather said. He said adding additional ancillary services—such as the company’s recent mobile imaging providers—are also priorities.
Matt Wolf a director and senior healthcare analyst at consulting firm RSM, expects the home healthcare industry to continue its growth.
“Patients expect to be treated when, where and how is best for them,” Wolf said. “Part of that is preference. Some patients, if given the choice, will want to be treated at home or in virtual care. For centuries, healthcare has been from a position in ‘this is what your doctor tells you.’”
DispatchHealth treats a number of conditions from viral infections like influenza to more chronic conditions like congestive heart failure and COPD.
Wolf said as other companies expand to compete with traditional providers, the fight for talent will likely increase, which could impact the margins of delivering care.
“We’re going to see hospital beds reduced in some markets and we’re going to see home care wages increase in some markets as we work through this transition,” Wolf said.
While Prather acknowledged a potential upward pressure on wages, he minimized its impact on the broader efforts to expand DispatchHealth.
“I think there is enough talent there,” Prather said. “Our labor costs are manageable at this point. I think that will shake out.”
The round included a $259 million equity round led by Optum Ventures and debt financing of $75 million, with up to an additional $75 million available for growth initiatives, led by HealthVentures, Silicon Valley Bank and SVB Capital.
