CEO: Almost Family Will Be ‘Consolidator’ in Health Care
With acquisitions at the forefront of their growth strategy, the nation’s fourth largest provider of home health care services is hoping to be a leader in consolidating services amid the changing payer landscape.
Louisville, Kentucky-based Almost Family Inc. (NASDAQ: AFAM) has been bulking up its home health operations with recent acquisitions, but is also placing bets on managed care and other alternative payment models coming down the line with investments beyond its core home care business, the company’s executives said this week.
“We will continue to work to be a consolidator in this industry,” Almost Family President Steve Guenther said during a presentation at the Jeffries Healthcare Conference. “We think the macroeconomic conditions and development of home care and the level of sophistication calls for companies to grow larger.”
The company has continued aggressively acquiring additional home health operations over the last 12 months, including expanding into Wisconsin last month. In the last year, the home care services provider has “put $150 million in capital to work,” resulting in about $140 million acquired revenue over six transactions, Guenther said. Almost Family has 23 home health care branches across 15 states, with a $615 million revenue rate in the first quarter of 2016, according to Guenther.
Over the past few years, the company has spread its investments “beyond” home health care, including a business that performs risk assessments at home in the managed care industry, a health care innovations business segment, an assessment company within the long-term care services industry and a management company for accountable care organizations (ACOs). Almost Family also has been developing new technology focused on interoperability and the overall management of data across electronic medical records platforms and data infrastructure.
All together, the company’s investment strategy is to “try to bring together assessments, clinical advancements, technology, population health and, most importantly, patient and physician engagement,” Guenther said. “We try to connect the payers and providers and get this broader perspective.”
While Almost Family has been diversifying outside its home health core for the past few years, the purpose now is forward-looking as the health system continues to shift its payment models. Guenther points to value-based purchasing, bundled payments, ACOs and managed care as areas where payment models have already begun to reward care coordination and consolidation. Home health will be an important crux in rewarding quality over fee-for-service models.
“We’re not smart enough to figure out which one of those approaches to achieve the same goal—to appropriately care and among patients and get them into the right venue at the right time—will succeed,” Guenther said in jest of the different investment groups. “Maybe multiple tracks will succeed. The good news is maybe we don’t have to figure it out. We will continue to work on it.”
Written by Amy Baxter