Posts in Industry Insights

Master Participation Funding Agreement-HealthGrowth Capital, LLC and Crestline Investors

February 20th, 2018 Posted by Industry Insights 0 thoughts on “Master Participation Funding Agreement-HealthGrowth Capital, LLC and Crestline Investors”

AUSTIN, Texas, Feb. 20, 2018 /PRNewswire/ — HealthGrowth Capital, LLC, a leading alternative specialty lender to healthcare companies and medical practices, is pleased to announce it has entered into a Master Participation Agreement with Crestline Investors,(“Crestline”). Crestline’s investment will be funded through its Opportunity Fund III, a credit fund that seeks to take advantage of dislocations and inefficiencies in the primary and secondary credit markets in North America and Europe. The fund provides sub-$50 million capital solutions, including direct lending, and focuses on under-served or capital constrained asset classes.

“We are pleased to enter into this agreement with Crestline as they have a significant understanding of and presence in the alternative lending space,” said Karl Kipke, CEO of HealthGrowth Capital. “Healthcare businesses need working, expansion and acquisition capital that provide desirable risk-adjusted returns. This agreement with Crestline Investors will give us the financial bandwidth to take HealthGrowth Capital to the next level.”

HealthGrowth Capital provides critical financial options to healthcare companies as they navigate a challenging operating and credit environment,” said Chris Semple, Managing Director, Crestline Investors, Inc. “HealthGrowth’s team of professionals have deep knowledge and expertise in understanding the financial needs of this vertical market and we are excited to be involved with their growth.”

About Crestline Investor. Inc
Crestline Investors, Inc., founded in 1997 and based in Fort Worth, Texas, is an institutional alternative investment management firm. Crestline specializes in credit and opportunistic investments, including financing and restructuring solutions for mature private equity funds. In addition, the firm manages a multi-PM equity market-neutral hedge fund, and provides beta and hedging solutions for institutional clients. Headquartered in Fort Worth, Texas, the company maintains affiliate offices in New York City, Chicago, London, Toronto and Tokyo.

About HealthGrowth Capital, LLC
HealthGrowth Capital, LLC, based in Austin, Texas is a leading alternative specialty lender to healthcare companies and medical practices.

HealthGrowth Capital, LLC

Pharmacies Victimized by Abusive PBMs And Their Unjust DIRs

December 27th, 2017 Posted by Industry Insights 0 thoughts on “Pharmacies Victimized by Abusive PBMs And Their Unjust DIRs”
By Karl Kipke, CEO of HealthGrowth Capital, LLC


PBM-abuse has reached an inflection-point.

“Direct and indirect remuneration” or “DIR” fees have become one of the most controversial and vexing policies introduced by PBMs against pharmacies in recent years. The concept of DIRs was initiated by CMS to assure that Part D sponsors and PBMs accurately reported rebates and other price concessions from pharmaceutical companies. Since then, PBMs have manipulated the purpose of DIRs to justify the assessment of unreasonable and oppressive fees on pharmacies through a process that is secretive, applied inconsistently and without any transparency. The PBMs operate with virtual impunity and without oversight. The fox is guarding the henhouse!

The amounts are staggering and add up to billions of dollars every year. Money that should fall to the bottom-line of community pharmacies.

PBM-imposed DIR fees can take many forms, and can amount to as much as 5.5% of the total value of the claim submitted by the pharmacy. They often cause the pharmacy’s final reimbursed to be less than the amount they originally paid for the drugs. Some specialty pharmacies are hit the hardest because they frequently dispense expensive, low-margin medications. The negative impact of DIR fees is compounded because they are calculated retrospectively, months after the pharmacies have been reimbursed. The uncertainty of the amount of DIR fees, combined with the impact upon pharmacy reimbursement, has had a profound financial impact on pharmacies across the country.

What is being done to make things better?

NCPA is working hard to lobby Washington to change all of this. The association recently commissioned a study with Wakely Consulting Group to examine the impact of enacting the Improving Transparency and Accuracy in Medicare Part D Drug Spending Act.
The study’s findings are compelling:

• The elimination of retroactive pharmacy payment reductions (a portion of DIR, or direct and indirect remuneration), and instead shifting them to equivalent point-of-sale price concessions, would save the federal government $3.4 billion in Part D payments made to plan sponsors between 2018 and 2027.

• The Centers for Medicare & Medicaid Services would spend less on federal reinsurance and low-income cost-sharing subsidies. The presence of additional discounts would contribute to lower total drug costs at the point-of-sale. This would decrease the federal government subsidy of low-income cost-sharing amounts while keeping low-income patient pay amounts relatively steady.

• The decrease in total drug cost at point-of-sale would also lower the amount of claim dollars in the catastrophic phase of the Part D benefit, because claims and amounts accumulating toward the true out-of-pocket catastrophic threshold would be lower. ¹

“This new Wakely study is vitally important in showing that DIR legislation will actually save taxpayers $3.4 billion over 10 years without subtracting any benefits seniors currently receive,” said NCPA CEO B. Douglas Hoey, Pharmacist, MBA. “For pharmacies, banning these after-the-fact fees is the fair way to achieve predictability in the reimbursement for the medications they buy and dispense.”

DIR fees are used by PBMs to shift financial risk to consumers and taxpayers and cause chaos on independent pharmacies that serve patients. PBMs argue that making any changes to DIR fees will drive up costs, both for the government and patients. The Wakely study, however, proves the PBM’s position to be false. It shows, in fact, that getting rid of retroactive pharmacy fees would reduce overall prescription drug costs for the government, and patients would see savings at the pharmacy, as well.

NCPA’s efforts are getting attention from the right people. In a recent tweet, FDA Commissioner Scott Gottlieb addressed this issue by tweeting, “Problem is rebates are used to offset premiums, not OOP [out-of-pocket] drug costs. So those needing drugs effectively subsidize premiums of those who don’t.”

Doug Hoey writes, “Eliminating the retroactive fees would also encourage true pay-for-performance arrangements in which pharmacies are rewarded for their value in helping produce better patient outcomes and lowering costs. Many of the “quality-based” pharmacy DIR arrangements that are currently being used are deeply flawed and blur the line between pharmacist performance and reimbursement for ingredient cost.” He adds, “Further, eliminating retroactive pharmacy fees would in no way impede efforts to address fraud. The language of the legislation prohibits payment reductions on “clean claims” — or those without defect, impropriety or fraud. In addition, CMS has far-reaching authority to address fraud, waste and abuse.”

What can community pharmacy owners do?

If you believe you have been wrongly assessed DIR fees, DON’T ROLL OVER! The PBMs know how busy pharmacy owners are and have created a modus operandi designed to take advantage of that. Unfortunately, most pharmacy-owners simply throw up their hands in frustration and give up.

Push Back!

Respond to the PBM in writing that they are obligated to provide a written justification including all the facts, evidence, documents, or other basis upon which the PBM relies in support of its position, as well as a detailed computation showing how any amount of money claimed by the PMB in the DIR was derived.

Write to your state Senators and Congressman. You will not be the first pharmacy owner to complain about PBM-abuse and you may be the tipping point that prompts them to dive deeper into the problem and understand what is really going on.

Finally, contact NCPA and tell them your story. NCPA has immeasurable resources and understands how detrimental and toxic DIRs have become to community pharmacies. You are a constituent and the association exists to help and support you. You can pay your NCPA membership fees with a smile on your face, knowing its leadership is advocating on your behalf to eliminate this racket. With a little luck, Congress will pass legislation in 2018 that ends this thievery once and for all.

PBMs and PBM-owned Part D plan sponsors are NOT above the law. Many laws and regulations exist which may curtail the PBMs’ ability to impose these draconian and abusive fees. HealthGrowth Capital works with attorneys who are well-versed on issues relating to DIR fees, and have developed multiple strategies to aid pharmacy clients suffering from the imposition of DIR fees. These remedies include lawsuits and arbitrations against PBMs and plan sponsors, to challenge the propriety and legality of DIR fees on behalf of pharmacies.


We predict that within the next 12-18 months, a series of class-action lawsuits will be filed against all the major PBMs alleging years of manipulative and abusive conduct, involving countless improprieties and many billions of dollars. We believe these suits will be settled and billions of dollars will be returned to victimized pharmacy-owners. The dark shadow and dominance of PBMs will be lifted.

¹Source: National Community Pharmacists Association

Press Release: Douglas Hoey appointed to Board of Advisors

November 30th, 2017 Posted by Industry Insights 0 thoughts on “Press Release: Douglas Hoey appointed to Board of Advisors”

 Doug Hoey, CEO of the National Community Pharmacists Association, joins Board of Advisors of HealthGrowth Capital, LLC, an alternative specialty lender to independent pharmacies.


Austin, TX,  November 30, 2017 –(– HealthGrowth Capital, LLC, a leading alternative specialty lender to healthcare companies and medical practices, is pleased to announce the appointment of Douglas Hoey, RPh, MBA as a new independent member to the Company’s Board of Advisors, effective immediately.

“We are delighted to welcome Doug to our Board of Advisors,” said Karl Kipke, Chief Executive Officer of HealthGrowth Capital, LLC. “Doug’s depth of knowledge and experience will be vital to our mission of assisting community pharmacies obtain the capital they need to thrive and navigate the ever-changing healthscape. He has spent his career promoting and defending the interests of independent pharmacies and his extensive expertise will be invaluable as HealthGrowth continues to solidify its position as a leading financial resource to these small business entrepreneurs.”

Douglas Hoey, RPh, MBA is currently the CEO of the National Community Pharmacists Association (NCPA) and also serves on the Boards of Directors for Surescripts, Mirixa, the NCPA Innovation Center and the Community Pharmacy Enhanced Services Network-USA.

“I am thrilled to join the Board of Advisors of HealthGrowth Capital. The Company has assembled an experienced team that understands the intricacies, challenges and opportunities that community pharmacies face today,” stated Mr. Hoey. “As a direct-lender of non-SBA loans to independent pharmacies, HealthGrowth provides critical financial options that are not always available through traditional banking channels.”

As a leading alternative specialty lender dedicated exclusively to addressing the complex financial needs of community pharmacies, medical practices and healthcare businesses, HealthGrowth offers fast-funding and reliable solutions through a variety of financing products and services. HealthGrowth’s proprietary underwriting process focuses on the specific and unique nature of healthcare reimbursements, allowing clients to access capital for all their business needs including growth, expansion/remodeling, acquiring new equipment and purchasing inventory.

Based in Austin, Texas, HealthGrowth has established a reputation for exemplary service by understanding the specific financing needs of its customers and providing financing solutions to meet those needs.

For more information about HealthGrowth Capital’s financing solutions for Healthcare Businesses, visit our Products page.

Read the online version of this press release at:

Should Community Pharmacies be Worried About Amazon?

November 9th, 2017 Posted by Industry Insights 0 thoughts on “Should Community Pharmacies be Worried About Amazon?”

By Karl Kipke, CEO of HealthGrowth Capital, LLC

Speculation about Jeff Bezos’ interest in the wholesale pharmacy space is causing sleepless nights among many independent pharmacy owners.  CVS and Walgreen’s watched billions of their equity market capitalizations evaporate the week Amazon announced it had gained wholesale pharmacy licenses in 12-states. It is true that Amazon has disrupted every business sector it has entered, from retail to grocery. But is the company biting off more than it can chew?  Some key-opinion leaders think it is.

Wholesale Distributors

John Hammergren, McKesson’s CEO, said this on the company’s recent quarterly earnings call:

If you actually think about what’s behind the scenes in terms of us taking credit risk, in terms of us processing invoices and processing returns, and then processing pricing on a regular basis, it’s quite significant and more nuanced, perhaps, than it would appear on the surface.”
When you think about the business of distributing pharmaceuticals, it is larger, and profoundly more complicated and regulated, than any market Amazon has entered before.

Consider McKesson, Cardinal Health and AmerisourceBergen:

  • They will generate a combined $500 billion in revenue in 2017;
  • Their hundreds of highly regulated, licensed and secure distribution centers crisscross the country with scale and IT sophistication that rivals any other industry. (These companies were executing just-in-time inventory replenishment long-before Amazon was founded in 1994);
  • Armed with massive balance sheets, they extend tens of billions of dollars of credit to captive, franchised or independent pharmacies throughout the country;
  • They manage and react to mountains of compliance and regulatory mandates generated by state and federal regulators every week;
  • They have one of the most powerful lobbies in the beltway.

The Big-3 represent a formidable force against any competitor, including Amazon.

Pricing and Reimbursement Complexity

Pharmaceuticals are among the most regulated products on the planet. The reimbursement process is fraught with traps, potholes and delays.  The money flows alone represent difficult waters to navigate:

Payors generally don’t regulate the price of pharmaceuticals, allowing the manufacturers to freely set prices. However, payors can set the reimbursement price/rate. The public sector (CMS) reimbursement process is totally different from the private sector. Managing thousands of plans, each with distinct reimbursement rates, tiered co-payment structures, terms and conditions is as much art as it is science.

Market Uncertainty and the Shifting Healthscape

Abrupt changes to the healthcare system, representing one-sixth of the US economy, is costly and inefficient. Yet, that is the environment providers, payors, drug companies and pharmacies find themselves operating in. Small shifts in policy can meaningfully impact trillions of dollars of healthcare services and how various constituents are reimbursed. When the Trump-administration announced that it would stop paying health care subsidies under the Affordable Care Act, it threw the industry into a tailspin of uncertainty and chaos that is still unfolding nearly a month later. One week, the Trump administration hinted that it might cut Medicare and Medicaid spending, while the following week, Maine voters cast ballots to expand Medicaid.

Healthcare in general, and pharmacy sales, could not be more uncertain, unstable or unpredictable. And yet that $500 billion market is where Amazon has set its sights to compete.

Winners and Losers

When the Wal-Mart, drugstore and supermarket chains entered the market, community pharmacies had to adapt and pivot, or they were forced to close their doors.  As the drugstore chains competed on price in a race to the bottom (today, a pharmacy is lucky to net $4 for a month’s prescription of Lipitor), independent pharmacies focused on higher-margin products and services like compounding, specialty drugs, customized blister and other packaging for customers and home delivery.  Amazon seems more likely to disrupt the national drugstore chains competing on price, rather than community pharmacies focused on higher-touch, higher-margin products and services.

There is no question that Amazon has disrupted every market it has entered and pharmacy will be no different. Everyone in the industry will have to work smarter and harder to maintain share, manage inventory levels, collaborate with physicians and clinical institutions, receive reimbursements and provide value-added services to their customers. But, given how community pharmacies have proven to be so resilient in the face of giants like Wal-Mart, CVS and Walgreen’s, they are unlikely to go the way of the corner bookstore when Amazon dives into the pool.

Expanding your Medical Office Practice

November 3rd, 2017 Posted by Industry Insights 0 thoughts on “Expanding your Medical Office Practice”

How to Increase Revenue

HealthGrowth Capital is invested in your success and wants your business to succeed. Here are a few tips that may help you expand your existing practice while you are contemplating an expansion.

Curb appeal? By adding attractive landscaping and by keeping your sidewalks clear of clutter and debris, you are already advertising pride in your business.  Also, making the waiting area comfortable and inviting can help ease frustrations of wait times.

Social MediaYou can engage your patients online by having an interactive website that provides test results online through a patient portal. By using Social Media and online technology your patients will be engaged in numerous ways. An interactive website, weekly articles on health tips, YouTube videos of your office, and booking online appointments, to name a few.

Offer Patient Education Classes. People in your community may be interested in a wellness approach to their own health. The more you engage your patients the more comfortable they become with you as their doctor. And that means they are more likely to refer others for your services.

Reduce wait times. Patient feedback states that long wait times compels them to search elsewhere for a Doctor. Patient satisfaction can have a tremendous impact on your bottom line. Improving patient satisfaction begins by making them feel comfortable and like they really matter. That is a direct result of taking care of your clinical staff. Supporting your clinical staff with the proper resources creates a smooth flow in the office.

Embrace Medicare. The Baby Boomer population is aging out and Medicare will be used by millions of people.

Buy rather than rent. Paying rent works well temporarily, but owning your business building is a better investment. Do you rent the space used for your practice? Do you dream of owning your own office? By far, the smartest investment you can make is by owning the space/building your practice is located. HealthGrowth Capital can help you get all of the pieces in place to make your dream a reality!

These are just a few tips that may increase your revenue. HealthGrowth Capital is there for your business needs and wants you to succeed so when you are ready to expand and needs business growth capital, your portfolio shows growth and a smart business plan.

Monday – Friday (CST):
8 AM – 6 PM

Saturday and Sunday:
Appointments, by request

925 S. Capital of TX Hwy
Ste. B100
Austin, TX 78746
512-598-0027 (fax)

HealthGrowth Capital provides financing options exclusively tailored to the needs of healthcare professionals who are striving to improve their practices and healthcare businesses in order to deliver a higher level of patient care.
facebookgoogle+View HealthGrowth Capital's profile on LinkedIn