PHM bets on remote monitoring, 'marriage’ with hospitals

KENT, Wash. – Performance Home Medical plans to use an additional $55 million investment from Grant Avenue Capital to shift its business from value-based care to “outcome-related payments,” says CEO Larry Mastrovich. 

To help make that shift, the company plans to invest in remote patient monitoring, which fits in neatly with its core disease state management platform for COPD and obstructive sleep apnea patients. 

“We’re looking to develop a care model that focuses on driving down costs and improving clinical outcomes,” he said. “There is actionable data from patients, and being able to do that remotely, including gathering information from devices through the connectivity that exists, is a huge advantage from where it was in the past.” 

PHM was acquired by Grant Avenue Capital in early 2024. 

The shift to “outcome-related payments” is necessary to provide a fuller picture of patient health, says Mastrovich – and insurers are recognizing that. 

“We believe we are in a very good spot with the reimbursement climate, but we try to think a little further out and understand that we may need to change the paradigm,” he said. 

The investment will also allow PHM to expand its footprint beyond the Pacific Northwest through acquisitions.  

“PHM had really strong regional density in its core markets, and we see an opportunity to extend beyond that and build up a national HME,” said Eric Kim, principal at Grant Avenue. “Working with Larry (who came onboard in 2024), and the team that we have in place, gives us confidence in being able to achieve that goal.” 

PHM is focused on acquiring hospital-owned HME businesses and has rolled up two so far, says Mastrovich. 

“There’s a need for programs that are affiliated with hospitals,” he said. “We understand how hospital systems operate. We’re very compassionate in our approach to what needs to happen in the transition (From hospital to home). We have a strong synergistic relationship with the hospital, and it has been a good marriage for us.” 

The investment in PHM comes during a period of renewed activity in the HME sector. Other recent high-profile deals include Owens & Minor’s planned acquisition of Rotech Healthcare and Cardinal Health’s planned acquisition of Advanced Diabetes Supply Group. 

“There’s a lot to like about the home medical equipment category,” said Kim. “We are seeing reimbursement stability, which has not always been the case, and there’s significant fragmentation. The underlying market continues to grow nicely in a large and mature category.”