ModivCare Inc. (Nasdaq: MODV) – a technology-enabled, home-focused health care services company – continues to execute on its multifaceted strategy.
In recent months, it has bolstered its personal care, remote patient monitoring (RPM), non-emergency medical transportation (NEMT) and meal delivery capabilities. Its ultimate goal is to be the premier company addressing social determinants of health (SDoH) for seniors.
“We’ve made significant progress executing on our strategy to transform ModivCare into a one-of-a-kind, integrated supportive care company with solutions focused on addressing the social determinants of health,” ModivCare CEO Dan Greenleaf said on the company’s Q3 earnings call Friday.
In September, the company completed acquisitions of CareFinders Total Care and VRI, a personal care provider in the Northeastern U.S. and a remote patient monitoring group. It also continued to “automate and modernize” its NEMT business and advanced the development of its “innovative” meal delivery offerings, according to Greenleaf.
“As the market transitions to value-based care, addressing social determinants of health for our nation’s most vulnerable patient populations is critical to promoting positive outcomes and reducing health disparities,” he said.
Based in Denver, ModivCare’s goal is to build a true national in-home care platform. It sees its customers’ reaction to its services over the last couple of years as evidence that such an idea is feasible.
Its personal care segment alone now includes 16,000 caregivers across seven states, with a census of around 18,000 patients per year. ModivCare brought in $493 million in net revenue during the third quarter of 2021, a nearly 54% increase compared to the $320.6 million it brought in over the same period last year.
Its business breakdown favored NEMT services, which brought in just short of $373 million in the quarter, while personal care and RPM services accounted for about $118.5 million and $1.6 million in revenue, respectively.
ModivCare also believes that the meal delivery aspect of its business has the potential to be a disruptor in the industry, potentially generating around $500 million in revenue for the company in the future.
“Whether it be in NEMT, food, personal care or remote monitoring, the company has never been better positioned,” Greenleaf said. “We’re executing on this vision, and compared to where the company was in 2019 relative to what I think we’ll be able to do by the end of this year, it’s incredible. And I would say the best is yet to come.”
The company also believes it can grow its RPM business significantly by leveraging its payer partners. VRI, Greenleaf said, already has relationships with some of ModivCare’s top payers, which will make that easier.
“We believe we have amassed and built the strongest technical platform in the industry, which further sets us apart from the competition,” Greenleaf said.
Growing personal care
ModivCare executives also suggested that the company would be in line for more acquisitions in personal care in the near future.
“We remain optimistic regarding the long-term growth of our personal care segment, as the personal care market is a $55 billion market that is highly fragmented and expected to grow rapidly, presenting an attractive opportunity for us to generate organic inorganic growth,” Greenleaf said.
Although its personal care segment has taken a hit due to labor shortages – with hours down anywhere from 10% to 30% – ModivCare believes the problem will be worked out as those challenges dissipate over time.
Having said that, the company is expecting a short-term depressed financial period for personal care due to recruiting woes and vaccine mandates becoming effective.
Still, ModivCare is confident that growth will beget growth, and that its trajectory is guided by much more tailwinds than headwinds. Growing demand in the space “almost has no end in sight,” Greenleaf said.
“Even in the states that we’re in, we’re still relatively small from a percentage-of-market-share [perspective],” ModivCare CFO L. Heath Sampson said on the call. “We’re in some of the largest markets for personal care as a whole. So when we can come out and do even better on recruiting than we have in the past, there’s a lot of upside in this business.”
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