A Search Fund Journey to $350m

I mean, it's always worth double clicking, especially I think in today's environment. The Medicaid that funds our population is different than the Medicaid many people think of, which is available for low income individuals to have health care. This is medication, Medicaid rather, that's carved out for people with long term needs as it relates to the IDD population.

This funding originated as funding for institutions. So if you like, can conjure in your mind in the 1960s these very large congregate settings where we would house people with developmental disabilities, like very inhumane, very costly and very very not habilitative, meaning these people go into these institutions and you would like never see them again.

That's on the IDD side. On the pediatric side, it's typically Medicaid for children, which is again a subset of Medicaid. And these are kids that without this would have to be in a hospital.

And so it's typically very cost effective for the states to provide the in home care versus long term hospital stays.

And on that final point, that's one of the big tailwinds in this whole very broad category of home care and home health care people often first think about the aging population, but a quick follow on to that is a recognition I guess or whatever the, by the health establishment that having people receive care in their homes is way, way more efficient, cost effective for everybody than in hospitals.

So there's this other kind of generational shift going on from hospital care to home care, correct?

Yeah. So it's cost effectiveness and better outcomes for the patient, typically.

And better outcomes. The other thing about Medicaid is that you're a price taker. Right. Explain what that means.

Yeah, so we're almost strictly fee for service, meaning that the states and the we call them MCOs, managed care organizations can set the rate for the services we provide. There are few exceptions where we can negotiate one off contracts just depending on the specificity, specificity of the needs. But typically we're a rate taker so we don't influence price.

And this is probably considered a risk. Right. This is a, this is an, a weakness if you will, when considering a business.

Correct. I think that was certainly one of the top issues when we were doing this transaction, especially in the search space, is you can't take price for yourself.