HealthSouth Continues Home Health Expansion Through Hospital Alignment

Following its recent acquisitions of Reliant Health Services announced in June and Encompass Home Health in November, national operator HealthSouth is continuing to align its services strategically to position its home health offerings for growth.

That includes locating home health operations near inpatient rehabilitation facilities, and focusing on a recent Centers for Medicare & Medicaid Services initiative on joint replacement care.

The multimillion-dollar acquisitions of Reliant Health Services and Encompass Home Health, at $750 million and $730 million, respectively, expanded the company’s home health footprint nationwide. Now, HealthSouth is positioned for more expansion in home health particularly in alignment with those inpatient rehabilitation facilities (IRF), its executives said during a quarterly earnings call with analysts this week.

“The home health development pipeline remains strong and is now prioritized on markets in which we operated in IRF and do not currently have a home health presence,” said Doug Coltharp, HealthSouth chief financial officer. “During the first half of 2015 we acquired seven new home health locations all in markets in which we have an IRF presence.”

The company is also honing in on the recent CMS initiative as a potential positive, seeing lower extremity joint replacements as a notable proportion of business.

“Lower extremity joint replacements in the 33 hospital markets account for 2.3% of our total Medicare discharges and 1.6% of our overall discharges,” said Jay Grinney, HealthSouth CEO and president. “While we are concerned about the precedent the models compulsory requirement sets we are encouraged that CMS recognizes the need for greater clinical coordination among providers and believe this model may prove to be a net positive for us.”

Seeing home health as a growing part of the care continuum for each episode of care, HealthSouth is further working toward aligning its home health and acute care offerings.

“To put the impact of this model on HealthSouth into perspective, HealthSouth has hospitals in 33 of the models 75 Metropolitan statistical areas and home health agencies in 25 of these MSAs. In 15 of these markets, we have both hospitals and home health agencies.”

Written by Elizabeth Ecker