Overview
A mid-market private equity firm in North America was evaluating a significant investment in a rapidly growing specialty healthcare services platform. The company had strong historical growth, attractive unit economics, and a clear expansion narrative. Management materials presented a case for continued share gains and geographic scaling. The bid sat in the $220M range.
The investment committee wanted independent validation before advancing. The financial model and management presentations were thorough. Several critical assumptions still sat on qualitative judgments about referral durability, reimbursement, and competitive response. Those were areas where people still in the market would change the quality of the diligence.
The firm engaged Primary Insight to get structured access to currently active and recently active physicians, practice administrators, referral partners, and operators across the specialty healthcare ecosystem.
Challenge
The core challenge was not a lack of information. It was a lack of independent, decision-grade perspective. Management had every reason to present growth as durable. Internal research and secondary sources could only go so far in testing that claim.
Key open questions included:
How durable were the referral relationships that drove patient volumes?
Were reimbursement dynamics and payer behavior consistent with the growth trajectory in the model?
How intense was competitive activity in the markets where the company was expanding?
Were there early signs of saturation or shifting physician preference that management might understate?
Could the assumed expansion capacity actually be staffed and filled in the local markets that mattered?
A wrong call on those points meant paying $220M for growth that was already leaving the platform.
Approach
Primary Insight custom-sourced physicians, former executives, referral partners, and operators matched to the specialty and geography. Each candidate completed a qualifying interview before any client conversation. The standard was current knowledge of referral flow, not a general healthcare overview.
The work ran as PI Calls against the underwriting questions: referral concentration, leakage, wait times, reimbursement friction, and competitive capture. When the first conversations opened a second risk around site-of-care shift, sourcing continued until that question was resolved.
Outcome
The expert conversations did not support the growth case as written. Some of the platform’s current operations still looked solid. Referral leakage was already visible to people still in the market, and the expansion capacity in the deck was weaker than management had implied.
The firm held the $220M bid. The decision was made on current operating insight rather than on the pipeline in the sale materials.
