Growing Regulatory, Financial Concerns Push Home Health Consolidations

As more regulatory pressures force consolidation among the health care industry as a whole, home health and hospice providers also are feeling the heat — joining forces to better compete in today’s evolving landscape.

Most recently, the University of Pittsburgh Medical Center, better known as UPMC, announced it would be bringing Family Hospice & Palliative Care fully into its fold, to be part of the UPMC Community Provider Services division, reports the Pittsburgh Post-Gazette in a recent article

The acquisition will further tighten UPMC’s grip on the hospice and home health sector in that region, creating a combined entity that serves about 8,500 patients and employs roughly 850 staff members. 

This consolidation follows on the heels of many others in the home health industry, including the joint venture between Allegheny Health Network — a UPMC rival — and home health and hospice specialist Celtic Healthcare.

While there’s no doubt the market demand for home health is booming, growing financial concerns regarding hospital readmission rates, changing payment models and accountable care alliances loom — and are shifting the health care landscape, forcing providers to team up to gain scale. 

“Economies of scale are something that can help a hospice,” Jon Radulovic, a spokesman for the National Hospice and Palliative Care Organization, tells the Post-Gazette. “We’re seeing consolidations, we’re seeing acquisitions.”

As large-scale mergers, such as that between Kindred Healthcare, Inc (NYSE: KND) and Gentiva Health Services, Inc. (NASDAQ: GTIV), create post-acute care and home health powerhouses, small mom-and-pop home health agencies are also making moves to consolidate or partner up with larger health care systems — which is proving to be a smart business decision.

“Margins are always thin, and absent a full merger, stronger alliances with hospitals mean more referrals,” the Post-Gazette writes. 

Read the full article here

Written by Emily Study