Startups

(Updated) Healthcare startup seeking to increase behavioral health facilities closes $50M Series B round

The two year old business wants to redefine the psychiatric hospital sector.

13974181800_649e6e5ae9_z

This post has been updated with comments from Oak HC/FT General Partner Andrew Adams and US HealthVest CEO Dr. Richard Kresch.

Behavioral health business US HealthVest, which seeks to increase the number of inpatient beds available to psychiatric patients for acute care, has closed a $50 million Series B round, according to a company statement. The three-year-old company will use the funding to support its expansion plan.

Oak HC/FT led the round, which also included founding investors Polaris Partners, F-Prime Capital Partners and Dr. Richard Kresch, who is also the CEO of HealthVest.

Kresch previously founded Ascend Health Corp. and served as CEO until Universal Health Services acquired it in 2012. He claimed that HealthVest “redefined the psychiatric hospital space.” He added, “De novo strategies and acquisitions of operating facilities with unrealized potential are the core of the US HealthVest business model. Each hospital is structured to offer multiple service lines in order to serve the needs of specific patient population groups.”

Update In response to emailed questions, Kresch said the business would use some of the funding to add 250 jobs in Washington and 200 in Georgia. He said the company planned to add two newly built hospitals and two acquisitions in the coming year.

In response to emailed questions Oak HC/FT General Partner Andrew Andrew Adams said its decision to invest in HealthVest is consistent with its strategy:

“It’s not really outside the box for us as it fits our strategy of targeting and backing strong, experienced dynamic entrepreneurs who are focused on large markets with extraordinary growth potential. In the market, growth comes because there remains massive unmet needs in behavior health. The USHV team has deep experience in building leading businesses in the sector and remaining at the forefront of developing programs to best meet the needs of the patients.”

He added: “In this this specific segment of the behavioral health market, experience matters. We’re now working with one of the best teams in the industry and think that is critical to long term success. ”

The company wants to address the supply-demand imbalance due to reduced inpatient capacity and an increase in “ER boarding” in which psychiatric patients, including people with substance abuse problems, are held in emergency rooms until beds become available for them.

USHV zeroes in on communities with unmet demand and acquires undermanaged facilities or builds new inpatient psychiatric hospitals. It provides inpatient, partial hospitalization, intensive outpatient, medication management, residential treatment and academic programs for adults and adolescents, the statement said.

In an interview with Venture Wire in 2013, Kresch said the changes brought about by healthcare reform, such as more people covered by health insurance and parity of behavioral healthcare with physical healthcare has created more opportunities for businesses like HealthVest.

Photo: Flickr user Ryan Melaugh

Shares0
Shares0