Home health demand is expected to rise significantly, and several factors make the industry a worthwhile sector for investors, says global investment banking firm Jefferies in a recent report.
Factors that bode well for the industry include an improved reimbursement outlook; rising interest in alternative payment models, specifically bundled payments (BPCI); and consolidation/merger and acquisition activity continues to be a growth driver for most companies.
Ultimately, home care is one of the key tools that could be used to drive overall health care costs down, the banking firm asserts.
“Home health is where it’s at,” says Jefferies in a statement. “We encourage investors to revisit the home health sector given our view that this group will see meaningful growth as demand for their low-cost services (both post-acute and pre-acute) grows as a result of improving hospital trends and the introduction of value-based payment models such as BPCI.”
In addition, improved reimbursement visibility is an incremental positive that should “embolden management teams to ratchet up M&A” activity, the banking firm says.
Written by Cassandra Dowell