LHC Group Forges Joint Venture With Hospital Owner

The third largest home health care provider in the country, LHC Group, Inc. (Nasdaq: LHCG), announced plans to form a joint venture with hospital company LifePoint Health.

A definitive agreement has been signed between LHC Group and Brentwood, Tennessee-based LifePoint Health (Nasdaq: LPNT) to share ownership and governance of the new joint venture that will operate LifePoint’s home health agencies and hospices, and select LHC Group agencies, LHC announced Wednesday.

LHC Group provides non-acute health care services in patients’ homes and operates more than 289 home health service locations, 64 hospice locations, 11 community-based locations and six long-term acute care hospitals. LifePoint owns and operates 72 hospital campuses in 22 states, as well as more than 40 post-acute service providers and facilities (including home health), and more than 30 outpatient centers.

This is far from the first time LHC Group has entered into a partnership with a medical provider. In April, the company partnered with Northern Arizona Healthcare to bring  its home health and hospice services to Arizona. And forming JVs with hospitals and other providers long has been a core strategy for LHC, which derives about 50% of its revenue from these arrangements.

“Regarding operations, LHC Group and LifePoint are fully aligned in culture, mission and strategy, seeking to expand high-quality home health and hospice services in the communities service by LifePoint hospitals,” Keith G. Myers, chairman and CEO of LHC Group, told Home Health Care News. “LHC Group and LifePoint will create a new joint venture governing board with equal representation, ensuring continued alignment of the new partnership’s mission and goals.”

Under the venture, the Lafayette, Louisiana-based LHC Group will take over day-to-day operations management of LifePoint’s 20 home health and 10 hospice locations, and all future home health and hospice acquisitions.

All of LifePoint’s subsidiaries will continue to operate under the same names.

“Post-acute services are an increasingly important part of our business and our communities’ health care needs,” Willian F. Carpenter III, chairman and CEO of LifePoint Health, said in the press release. “By leveraging LHC Group’s expertise, we will gain access to the resources and the infrastructure needed to enhance our existing home health and hospice services, invest more in care coordination across our network, and expand access to these services in all our communities.”

Subject to certain regulatory approvals and closing conditions, the joint venture will begin at the end of the year.

This announcement follows a budding trend of home health companies partnering with health care companies. Last month, Almost Family formed the largest public hospital/home health joint venture deal ever with Community Health Systems (NYSE: CYH).

LHC Group declined to provide financial details of the transaction. The company is scheduled to announce its quarterly earnings tomorrow. As of press time, LHC Group’s stock was up by 3.76%.

Written by Alana Stramowski