Encompass Enters Illinois with VNA Healthtrends Acquisition
Encompass Home Health and Hospice, already one of the largest home health providers nationally, now is entering Illinois for the first time by acquiring VNA Healthtrends.
Based in Des Plaines—about 20 miles northwest of downtown Chicago—VNA Healthtrends serves markets in Illinois, Indiana, Ohio, Michigan, and Arizona. The Michigan locations were not part of the sale, Encompass Chief Strategy Officer Luke James told Home Health Care News.
“We’ve known VNA Healthtrends for a number of years,” James said. “They’ve got a great reputation in the market and a great business.”
Dallas-based Encompass is not disclosing the acquisition price. VNA Healthtrends received about $7 million in total home health agency Medicare payments (non-LUPA) in 2014, according to Centers for Medicare & Medicaid Services (CMS) data.
This acquisition made sense as a way for Encompass to start providing home health services in markets where HealthSouth (NYSE: HLS) inpatient rehabilitation facilities (IRFs) also are located, explained James.
Birmingham, Alabama-based HealthSouth—which will be renamed Encompass Health Corporation effective January 2018—closed on its $750 million acquisition of Encompass Home Health and Hospice in 2015. Since then, a key strategy has been to control more of the post-acute continuum of care by syncing up the company’s home health and IRF operations.
In 2017, HealthSouth plans to invest between $50 million and $100 million in home health and hospice acquisitions to drive this strategy, executives said in February.
The VNA Healthtrends acquisition not only ushers Encompass into Illinois, but also will enable the home health provider to offer services in conjunction with a HealthSouth IRF in the Mesa, Arizona, area for the first time.
While patients have a choice of home health provider when they are discharged from an IRF, HealthSouth and Encompass have “cross-continuum protocols” that can create value for patients, James said.
Other companies, such as Louisville-based Kindred Healthcare (NYSE: KND), are pursuing similar strategies to maintain control over quality and costs for post-acute patient populations. These companies believe that this will make them more successful, strategic players as the U.S. health care system evolves toward more value-based, coordinated care.
Written by Tim Mullaney