LHC Group to Combine Home Health and Hospice Offices

Coming off a strong 2016, one of the nation’s biggest home health care providers is focusing its growth strategy on adding hospice services to its current locations.

Lafayette, Louisiana-based LHC Group (Nasdaq: LHCG) has found its stride by focusing on hospital partnerships and bundle payment initiatives. And now, the provider wants to add hospice offices to each home health office, Keith Myers said at RBC Capital Markets Health Care Conference in New York Wednesday.

“Our vision is that home health and hospice will be co-located in every market that we are in,” Myers said. “If you look at the number of home health locations we have compared to hospice you’ll see us adding large numbers of hospice in the years to come.”

LHC Group plans to do this through organic growth as well as potentially buying smaller providers and attaching them to already-established home health agencies.

“We’re not talking about having two providers in the same community,” Myers added. “The model actually has to be both providers in the same building, co-located with a common working area for staff. There would be interaction between staff members on each side to help transition patients from home care to hospice.”

Policy Impacts

LHC Group is bullish on its own growth in the coming years, but, at this point, isn’t sure how the new Trump administration will impact home health. More specifically, the company is unsure how the new secretary of the Department of Health and Human Services (HHS) Tom Price M.D will handle potential regulation rollbacks and changes to the Affordable Care Act (ACA).

“Dr. Price has been a long time champion for the home health space, but I don’t know if I’m clear yet on how much he’s going to do in what period of time,” said Myers.

Price, in particular, has mentioned potentially loosening mandated value-based purchasing initiatives like bundled payments—something LHC Group has been a vocal supporter of. Earlier this month, Trump signed an executive order freezing regulations, which effectively pushed back the implementation date of new and expanded bundled payment models.

“Generally speaking, for us, the more bundles, the better,” Myers explained. “For example as a fee-for-service Medicare provider, patients would be discharged, and we would engage with them after discharge from the hospital. In a bundle model, we are actually engaging with patients preoperatively. We are part of the whole care experience, resulting in reduced costs and higher quality.”

Bundled payments also allow LHC Group to utilize more telemedicine and increase patient encounters, Myers added.

“Patient encounters are up significantly, but they are different types of encounters,” he said. “Some are in hospital settings and some are through telemedicine, but in a fee-for-service model there is no reimbursement for that. A nurse driving out to a home for everything is not as efficient.”

As the year progresses, the company is focusing on utilizing bundles as much as possible in its expansion of hospice offices, and, if any buying does go on, it is focusing on acquiring smaller providers to grow over time, Myers explained.

Correction: A previous version of this story incorrectly stated that LHC Group beat its revenue prediction for the fourth quarter of 2016 by almost $4.86 million, with revenue of $226.03 million. Those figures were from the second quarter of 2016. The fourth quarter 2016 figures have not been released yet. 

Written by Alana Stramowski

Alana Stramowski

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