The Inside Look

Get an inside look into Madrona’s latest Company & Market Overview to discover more about the unprecedented growth occuring within the end-of-life services sector and how Madrona is uniquely positioned to rapidly carve out national market share with its “Managed Palliative & Hospice Care Services”. 

Madrona is the first company of its kind to provide Managed Palliative & Hospice Services. Unlike traditional independent Hospices, Madrona partners with large senior-care organizations to jointly provide their patients with palliative and hospice services.  Our mission is to create reciprocally beneficial partnerships with leading healthcare organizations to jointly offer a complete end-of-life care services platform. 

Services

Get an inside look into Madrona’s latest Company & Market Overview to discover more about the unprecedented growth occurring within the end-of-life services sector and how Madrona is uniquely positioned to rapidly carve out national market share with its “Managed Palliative & Hospice Care Services”. 

Note from the CEO

“Its not very often a super low-risk, high-yield investment opportunity like this comes along.  With Medicare as the end client, there is zero counterparty risk. There is also zero economy or market risk – it doesn’t matter if stocks rise or fall.  If anything, mortality rates are likely to increase during economic downturns.   Zero counter-party risk coupled with zero market risk in a booming sector makes hospice as close to riskless an investor will find. This business is essentially recession proof. As far as timing is considered, we are sitting at the precipice of a vortex. Anyone who understands economics and investing will immediately recognize this as a Goldilocks investment opportunity. Now, its simply a matter of execution, and we’ve invested in the right people who are making it happen.”

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Michael Steele – CEO Madrona Health Inc.

Industry primed for explosive growth

Timing couldn’t be better for a hospice provider with regional aspirations. With more than 10,000 elderly turning sixty-five a day, the aging baby-boomer population is quickly becoming the “geriatric” generation.  As a result, the demand for end-of-life services is going to explode over the next few decades. Demographics are one of the leading drivers behind the sector’s growth, but it’s only a part of the equation.  A confluence of other equally compelling factors are propelling increased demand for Home Health and Hospice Services. In short, these drivers can be attributed to the rising prevalence of chronic disease, Medicare’s cost reduction objectives, changing perceptions and increased awareness. Medicare’s affirmative policy position and supportive regulations are also providing significant tailwinds to growth in the sector. 

Timing couldn’t be better for a hospice provider with regional aspirations. For the first time in the United States history the number of “dying” have started to outpace birth rates. The demand end-of-life care is going to explode over the next few decades. Demographics are a huge factor behind the increasing demand for senior-care services, but its only part of the equation. A confluence of equally compelling factors are all converging simultaneously, creating the “perfect storm” of unprecedented investment opportunities.  

What we Know

Supply/Demand Imbalance

 In 2018, Home Health and Hospice deal volumes were the highest in the vertical’s history, far exceeding 2017, itself an impressive year. Notably, Hospice deal volumes increased by 36% over the same period the preceding year driving multiples to as high as 19.4x EBITA.  As to why existing healthcare conglomerates and private equity firms are snatching up home health and hospice businesses at breakneck speeds despite historically high multiples – it simply comes down to one thing  – demand far exceeds supply. The fervor of demand for hospice is expected to continue for the foreseeable future as providers look to extend their care offering through the end-of-life process.  With a key focus on partnerships and Managed Palliative & Hospice Services, Madrona is uniquely positioned to rapidly capture significant market at the national level. 

What we Know

Supply/Demand Imbalance

In 2018, Home Health and Hospice deal volumes were the highest in the vertical’s history, far exceeding 2017, itself an impressive year. Notably, Hospice deal volumes increased by 36% over the same period the preceding year.  The unprecedented demand and large deal volumes have driven Hospice multiples higher for the fourth straight quarter, with mean EV/EBIT multiples reaching as high as 19.4x.  In layman’s terms, what this essentially means is that buyers/investors are paying nearly 20x earnings in an effort to strategically position their organizations with hopes of capturing some of the ballooning demand.  As to why existing healthcare conglomerates and private equity firms are snatching up home health and hospice businesses at breakneck speeds despite historically high multiples – it simply comes down to one thing  – demand far exceeds supply. Supply/demand imbalances are one of, if not the first thing, investors use as a metric when evaluating opportunities. However, the supply/demand imbalance is just one among a multitude of supporting ingredients making home health and hospice extremely attractive areas for investment. Although the blockbuster type deals witnessed in 2018 are likely to decelerate this year, particularly in home health as providers work to implement Medicare’s recently introduced Patient-Driven Groupings Model (PDGM), the fervor of demand for hospice is expected to continue for the foreseeable future as providers look to extend their care offering through the end-of-life process.  With a key focus on partnerships and Managed Palliative & Hospice Services, Madrona is uniquely positioned to rapidly capture significant market at the national level. 

The Market

Highly Fragmented, Underutilized

Hospice is a $35 billion market that has grown at 4.0 percent CAGR during the past five years and is anticipated to grow at 4.5 percent CAGR over the next five years.  The market is extremely fragmented with the top 10 providers accounting for 17.5% of total market with half the top 10 dominated by 2 players. The top 100 competitors account for less than 43% of the total market. Nearly 60% of the market is composed of independent sole proprietors. Margins for Hospice operators on average range from 15%-30% depending on management’s ability to control costs. The higher margins in hospice versus other health service sectors is one among many positive factors contributing to the increased interests from investors and existing care providers. 

The Market

Highly Fragmented, Underutilized

Hospice is a $35 billion market that has grown at 4.0 percent CAGR during the past five years and is anticipated to grow at 4.5 percent CAGR over the next five years, according to data analyzed from Kaufman research .  The market is extremely fragmented with the top 10 providers accounting for 17.5% of total market with half the top 10 dominated by 2 players. The top 100 competitors account for less than 43% of the total market. Nearly 60% of the market is composed of independent sole proprietors. Margins for Hospice operators on average range from 15%-30% depending on management’s ability to control costs. The higher margins in hospice versus other health service sectors is one among many positive factors contributing to the increased interests from investors and existing care providers. 

Another positive characteristic making the sector such an attractive investment is Medicare’s favorable position towards hospice. Out-patient hospice is a fraction of the cost compared to in-facility care. These cost advantages have been the driving force behind Medicare’s positive policy changes that promote hospice as an alternative to curative care for the terminally ill. Medicare’s positive stance is reflected in the reimbursement rate increases for Hospice over the last few years, versus cuts seen in Home Health. Another not so well know fact contributing to growth in the sector are new policies coming down the pipe. In effect, these new policies require that physicians refer hospice to their patients sooner rather than later if the prognosis is less than favorable. Oncology is one of the areas Medicare is targeting first due to the huge costs associated with radiotherapy. According to the National Hospice & Palliative Care Organization (NHCPO), only 48% of those enrolled in Medicare died on Hospice in 2016.  Medicare hopes to increase hospice utilization rates in their mission to cut costly end-of-life care expenses. The regulator’s favorable stance on hospice coupled with the new requirements bodes very well for existing providers and will be a significant boost to hospice utilization rates going forward. 

The Opportunity

The recent deal volumes and their accompanying multiples validate that there is an extreme amount of untapped value in the sector. The number of deals and the price buyers are willing to pay suggests there is several years of deal activity ahead, as nearly all the larger groups intend to grow by acquisitions over the next 3-7 years.  Favorable market dynamics – i.e. growth industry, highly fragmented, easy access to capital, supportive polices – are creating a vacuum of opportunity for a nimble hospice provider with a clear growth strategy to carve out market share. Very seldom does a business opportunity present itself which possesses so many compelling attributes with such a low risk profile and is immune to market and economic factors. 

The Opportunity

Amongst the numerous industry reports reviewed in the course of drafting our updated market overview, analysts failed to identify or address the opportunities that these large-scale mergers & acquisitions have created for the smaller operators to scale.  Firstly, deal volumes and their accompanying multiples validate that there is an extreme amount of untapped value in the sector. The number of deals and the price buyers are willing to pay suggests there is several years of deal activity ahead, as nearly all the larger groups intend to grow by acquisitions over the next 3-7 years. Secondly, with all the mergers and acquisitions at the large provider levels over the last year, organic growth for these conglomerates will inevitably slow over the next few years as they work to integrate and familiarize themselves with their new suitor(s).  The smaller providers, however, lack the sophistication to stay ahead of impeding policy changes, nor do they have the resources to develop new IT platforms to stay current with Medicare’s ever-evolving reporting criteria. The slowing organic growth at the conglomerate level, and attrition at the smaller level, creates even more opportunity than all the already positive industry data suggests. Favorable market dynamics – i.e. growth industry, highly fragmented, easy access to capital, supportive polices – are creating a vacuum of opportunity for a nimble hospice provider with a clear growth strategy to carve out market share. Very seldom does a business opportunity present itself which possesses so many compelling attributes with such a low risk profile and is immune to market and economic factors. 

Factors Driving Demand

Various factors are driving a surge in the outpatient hospice industry. These factors include: 1) a massive shift in demographics, 2) increasing government burdens leading to positive policy changes, 3) rapid increase in chronic diseases, 4) affordability, 5) awareness & education, 6) consolidation through aggressive mergers & acquisitions, and most importantly 7) the patient’s desire to live their final days at home rather than a facility. These sweeping shifts have created tremendous opportunities for smaller hospice businesses to scale. 

Demographic Wave

The aging baby boomer population is entering a tipping point with over 10,000 people turning 65 a day. Home health and hospice services are widely underserved and are amongst the fastest growing segments in the senior-care services sector. 

The number of Americans ages 65 and older is on course to more than double from 46 million today to over 98 million by 2060, while the 65-and-older age group’s share of the share of the total population will rise to nearly 24 percent from 15 percent. 

Path to Profitability

Madrona used various qualifiers to identify 9 key counties on the West Coast as targets for expansion. The company has already begun the preliminary license application process with the intent to establish 5 offices outside of Arizona by year 3. Madrona is staffed and prepared to immediately scale into additional markets where our partners have an established market presence. 

Path to Profitability

Madrona has identified 9 key counties on the West Coast as targets for expansion. We’ve identified these counties using various qualifiers that consist of: 1) population, 2) percentage of population eligible for Medicare, 3) number of Medicare patients currently on hospice, 4) number of hospice care providers within each market, and 5) total revenue generated by hospice in each market. The company has already begun the preliminary license application process with the intention to establish 5 offices outside of Arizona by year 3. Madrona is staffed and prepared to immediately scale into additional markets where our partners have an established market presence. 

Madonna expects to be cashflow positive within its first six months of operations. Funds from the Series-A round, along with cash flow generated from operations will be used to scale the business regionally, then nationally. The company’s national expansion efforts are contingent on forming partnership with existing providers that are looking to extend their care services through Madrona’s Managed Palliative & Hospice Services.  Madrona is in advanced talks with providers at both the state and national level. 

Competition & Risks

We’ve conducted extensive research on the market and the competitive landscape using data collected from Center for Medicare & Medicaid Services (CMS) and individual state Health Departments. We’ve obtained additional information about each of our target markets through conversations with hospital administrators, physicians, existing home health groups and other industry professionals. 

In our analysis we’ve grouped risks based on consequences, from marginal to severe, and likelihood, from rare to certain. The two biggest risks Hospice providers face are: 1) regulatory risk, 2) reputation risk.  Regulatory risks can be navigated by understanding current and future policy changes and adjusting the business model accordingly. Reputation risk simply comes down to quality of care. It all starts at the top and Madrona has hired tenured executives with decades of experience successfully building and managing multi-state Home Health & Hospice businesses.  

Competition & Risks

We’ve conducted extensive research on the market and the competitive landscape using data collected from Center for Medicare & Medicaid Services (CMS) and individual state Health Departments. We’ve obtained additional information about each of our target markets through conversations with hospital administrators, physicians, existing home health groups and other industry professionals.

The process of enterprise risk analysis begins with identifying the external and internal threats that can inhibit achieving the planned results. The threats can be grouped into three categories, namely “general business risks” that all companies face, “industry-specific risks” that affect businesses within specific industries and “company-specific risks” that the particular company faces. In our risk analysis we’ve grouped these categories based on consequences, from marginal to severe, and likelihood, from rare to certain. The two biggest risks Hospice provider face are: 1) regulatory risk, 2) reputation risk.  Regulatory risks can be navigated by understanding current and future policy changes and adjusting the business model accordingly. Reputation risk simply comes down to quality of care. It all starts at the top and Madrona has hired tenured executives with decades of experience successfully building and managing multi-state Home Health & Hospice businesses.  

About Us

Over 100 Years combined Industry Experience.

Madrona Health Inc. (MHI) owns and operates Madrona Hospice & Palliative Care (MHPC). The company is headquartered in Scottsdale Arizona, with 2 additional offices in Mesa and Chandler, covering all of Maricopa County. By the end of 2019 Madrona will have acquired supplementary licenses to provide palliative and hospice services to the entire state of Arizona. By the end of 2021, Madrona will have established hospice and palliative care businesses in multi-states.

Madrona is not your typical hospice provider and is the first company of its kind to provide “Managed Palliative & Hospice Services“. Unlike traditional hospices that compete for business at the case-manager level, Madrona partners with large healthcare organizations and physician groups to jointly provide continuation of care to their patient’s through the end-of-life process. This model resonates with physicians, their patients and families, and has been key factor contributing to our burgeoning momentum. For a new hospice provider to achieve an average daily census of 100 patients in its first year is unheard, until now. Madrona’s goal is not only to become the best end-of-life care services provider, it intends to be at the forefront of establishing new industry standards that help shape care policies.

Madrona Health’s mission is to partner with leading senior-care service providers and build MHPC into a regional hospice & palliative care services powerhouse. Part of this mission includes partnering with the Center of Medicare Services, private insurers and accrediting bodies to enhance the end-of-life care process while improving costs for providers and affordability for patients and families.

About Us

Over 100 Years combined Industry Experience.

Madrona Health Inc. (MHI) owns and operates Madrona Hospice & Palliative Care (MHPC). The company is headquartered in Scottsdale Arizona, with 2 additional offices in Mesa and Chandler, covering all of Maricopa County. By the end of 2019 Madrona will have acquired supplementary licenses to provide palliative and hospice services to the entire state of Arizona. By the end of 2021, Madrona will have established hospice and palliative care businesses in multi-states.

Madrona is the first company of its kind to provide “Managed Palliative & Hospice Services“. Unlike traditional independent Hospices, Madrona partners with large senior-care organizations to jointly provide their patients with palliative and hospice services.  Our mission is to create reciprocally beneficial partnerships with leading healthcare organizations to jointly offer a complete end-of-life care services platform.

Executive Team

It all starts and ends with the executive team!

Michael Steele

Michael Steele

Chief Executive Officer

Monica McCullough

Monica McCullough

Regional Director of Clinical Services

Freshteh Sena

Freshteh Sena

Director of Business Development

Douglas Maready

Douglas Maready

Chief Medical Officer

Wendy M. Blum

Wendy M. Blum

Regional Director of Operations

Dr. Veena Gulaya

Dr. Veena Gulaya

Management Consultant

Executive Team

Since restructuring late last year, Madrona made broad staff changes, hiring a team of industry veterans with decades experience successfully building and managing multi-state Home Health & Hospice businesses. 

Why our Investors love Madrona

How we're different

Performance Driven at the Core

Economics are the core to every business decision. We've kept executive salaries low and tied total compensation to performance. This structure ensures that investor capital is used for operations, not exorbitant staff remuneration. It also incentivizes the executive team to maximize their performance knowing that their total compensation isn't limited.

Partnering our way to Success

Working in partnership is in our DNA. It’s the way we think, the way we behave, and the way we learn. We choose our partnerships based on the alignment of core values, long-term shared purpose, complimentary strengths, reciprocal benefits, and value creation. Our partnership approach has been integral to our successes. Through strategic partnerships we are able to create the best value for the company, our partners, and shareholders.

Commitment to Profitability

Our employee performance model ties directly into our revenue model and allows us to make real-time adjustments to executive pay based on actual daily revenues, not budgets or projections. This structure allows us to maintain our margin objectives whenever an unforeseen fluctuation in revenues arise. Increasing shareholder value is fundamental to every decision.

Data & Analytics Focused

It's a data driven world we live in and it is more than just installing the right tools and applications. Being data-driven is about making data and analytics part of the business strategy, its systems, processes and culture. It’s about creating a mindset in which analytics form the basis of all fact-based business decisions, and are embraced at all levels of the organization. Unlike traditional enterprises, data-driven organizations don’t grow linearly, they grow exponentially.

Complete Transparency

We treat our investors, whether private or institutional, as our business partners, and we believe complete transparency is core to every successful partnership. We provide this transparency by furnishing our shareholders with quarterly updates and yearly third-party audited financials. We like to sleep soundly at night and know our investors will too; confident their investment is safe.

Shaping Industry Reform

Madrona’s policy mission is both simple and incredibly complex: Our goal is to help policymakers make decisions that are based on the best available information. This may not sound much different from the lip-service of other Medicare providers, but the difference is in the details. Our results are fueled by the best data, the strongest methods, and the brightest minds. Our work is as transparent and open as possible. Our commitment to the public good means that we want our work to reach and be understood by as many people as possible, not just other experts and academics.

News & Press

Please visit the site on your desktop to see Madrona’s latest news and press releases. 

News & Press

Madrona restructures, hires seasoned execs to lead expansion.

Madrona Health hires industry veterans with decades experience building multi-state home health and hospice businesses to spearhead the company's regional expansion. 

Madrona earns Partner Level Four, We Honor Veterans

Madrona received its level four certification with the Veteran's Association for the We Honor Veteran's program and has become a preferred provider.

Madrona in advanced partnerships talks with multiple physician groups

Madrona Health's unique business model has caught the attention of multiple large-scale physician groups interested in partnering with Madrona to provide hospice & palliative care to their existing network of patients.

Madrona prepares for The National Institute of Jewish Hospice Accreditation

NIJH was established in 1985 to help alleviate suffering in serious and terminal illness. Its 52,000 members are comprised of business and professional leaders, and a consortium of endowing foundations.

Request a Copy

Madrona’s comprehensive analysis of the industry and market opportunity are outlined in the company’s 50-page business plan.  If you are a qualified high-net-worth individual or a professional investor and would like to learn more the end-of-life market opportunity, please fill out the form below or contact Madrona’s Director of Operations, Wendy M. Blum at (480) 566-5997.  

Request a Copy

If you are a qualified investor or high-net-worth individual and would like to learn more about this investment opportunity, please fill out the form below or contact Madrona’s Director of Operations, Wendy M. Blum at (480) 566-5997.  

CONTACT

CONTACT

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DISCLAIMERS

This is not an offer to sell or a solicitation of any offer to buy any securities. Offers are made only by prospectus or other offering materials. To obtain further information, you must complete our investor questionnaire and meet the suitability standards required by federal and state laws. 

Statements in this presentation that are not historical facts are forward-looking statements based on current expectations of future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition, we, through our management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We therefore caution against placing substantial reliance on the forward-looking statements contained in this presentation. All forward-looking statements included in this presentation are made only as of the date of this presentation and we assume no obligation to update any written or oral forward-looking statements made by us or on our behalf as a result of new information, future events or other factors.

The information contained in this website and the company’s documents are confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of Madrona Health Inc.

The opinions expressed are in good faith and while every care has been taken in preparing this information, Madrona Health Inc. makes no representations and gives no warranties of whatever nature in respect of the information, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained herein.

Madrona Health Inc and its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in these documents.

The information you are attempting to access is restricted to accredited investors only. 

DISCLAIMERS

This is not an offer to sell or a solicitation of any offer to buy any securities. Offers are made only by prospectus or other offering materials. To obtain further information, you must complete our investor questionnaire and meet the suitability standards required by federal and state laws. 

Statements in this presentation that are not historical facts are forward-looking statements based on current expectations of future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by such statements. In addition, we, through our management, from time to time make forward-looking public statements concerning our expected future operations and performance and other developments. All of these forward-looking statements are subject to risks and uncertainties that may change at any time, and, therefore, our actual results may differ materially from those we expected. We therefore caution against placing substantial reliance on the forward-looking statements contained in this presentation. All forward-looking statements included in this presentation are made only as of the date of this presentation and we assume no obligation to update any written or oral forward-looking statements made by us or on our behalf as a result of new information, future events or other factors.

The information contained in this website and the company’s documents are confidential, privileged and only for the information of the intended recipient and may not be used, published or redistributed without the prior written consent of Madrona Health Inc.

The opinions expressed are in good faith and while every care has been taken in preparing this information, Madrona Health Inc. makes no representations and gives no warranties of whatever nature in respect of the information, including but not limited to the accuracy or completeness of any information, facts and/or opinions contained herein.

Madrona Health Inc and its subsidiaries, the directors, employees and agents cannot be held liable for the use of and reliance of the opinions, estimates, forecasts and findings in these documents.

CLINICAL SERVICES

HOSPICE & PALLIATIVE

MOBILE PHYSICIANS

DATA SOLUTIONS

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DISCLAIMERS

DISCLAIMERS

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