College roommates Steven Katz and Dr. Jeffrey Schor co-founded PM Pediatric Care, a pediatric urgent care company, in 2005 with the goal of providing children an option for support outside of the emergency department.
Since then, the Long Island, New York-based company has treated 6.5 million patients, grown to have 78 locations across 15 states, and has added service lines like telemedicine and behavioral health. It makes its revenue primarily through reimbursement from insurers and accepts most health plans. PM Pediatric Care also provides virtual physical and mental health services to select schools. Earlier this week on Tuesday, PM Pediatric Care announced that it has secured $50 million in Series E financing and plans for expansion.
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The funding round was led by Scopia Capital and included participation from Jefferson River Capital. In total, PM Pediatric Care has raised more than $140 million, said Steven Katz, co-founder and co-CEO of the company.
With the funding, PM Pediatric Care will continue to grow by adding new business lines like primary care. In addition, it will expand its number of sites, particularly in areas it already has a presence, like Chicago, Los Angeles and Dallas, Katz said. The company is also looking to build out its behavioral health business.
“We think that’s such an underserved market and there’s an opportunity to help hundreds of thousands of kids around the country who really need that help, that intervention,” Katz said in an interview.
Katz added that the company is “always on the lookout” for potential acquisitions, including for urgent care, behavioral health or other service areas. PM Pediatric Care is also looking to break into value-based care and move away from the traditional fee for service model. The funding is expected to help support this move.
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“[Value-based care] is much bigger now in adult care,” Katz said. “It’s not that widespread in pediatrics, but we think there’s a big opportunity for us to do well in that and part of that is based on doing things efficiently. … If we do want to enter that area, we’re going to need very, very robust systems to track that outcome data, so that would be another area of investment.”
In the current economic climate, many companies are struggling to raise capital with investors conducting more due diligence on the companies they’re looking to put money into. For PM Pediatric Care, it was no different. Katz said it was a “tougher environment” and that it took awhile to raise the funds. But leaning into its goals of growing its behavioral health platform and moving into value-based care helped the company secure its financing.
In terms of an exit strategy, the company is not looking to make any major moves right now, but is open to options, Katz stated.
“We’re just looking to build a great company,” he said. “It’ll be at least a couple of years before we really would be looking for any sort of liquidity event.”
Other pediatric urgent care companies include Pediatrix and Little Spurs Pediatric Urgent Care, though Katz claimed PM Pediatric Care has a larger footprint than others in the space.
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