Home Health CEOs Seek Growth Through Hospital Deals, Personal Care

The move to value-based payment systems and managed care can be a boon for home health agencies — as long as savvy operators know how to navigate the new landscape by focusing on partnerships and the rising importance of personal home care.

The outlook for the home health industry is cautiously bright, Lincoln Healthcare Leadership founder and President David Ellis told the crowd Sunday at the Post Acute Link Care Continuum Conference in Chicago, citing his firm’s new wide-ranging survey of home health CEOs. But the smart home health operator needs to take advantage of some key trends brewing as payer systems shift rapidly.

“As value-based care rolls out, physician groups will grow in importance,” Ellis said, noting that these groups will face increasing pressure to provide the best care for their patient populations at the lowest cost — something that home health can offer, particularly compared to skilled nursing facilities. He called on home health companies to explore partnerships with physician groups by demonstrating the quality and efficiency that they can provide over competing forms of care.


“You’re not saddled with real estate, which is everyone’s problem as we shift to value-based care,” Ellis said.

Hospitals will additionally represent a fertile ground for collaboration going forward, with Ellis saying that the average hospital claims just 2% to 3% of its revenues from their home health operations.

“Health systems will probably not do that well in home health,” he said, encouraging the executives in attendance to seek out joint ventures with hospitals. Ellis specifically cited Almost Family’s (Nasdaq: AFAM) acquisition of Community Health Systems’ (NYSE: CYH) home health and hospice unit in 2016, a landmark $128 million deal that saw one of the largest hospital companies in the nation cede majority control of its ancillary home health business to a strategic partner.


Ellis also expressed optimism about the personal care space, particularly as these providers could be the eyes and ears of managed care companies.

“Managed care needs to know what’s happening in the home,” he said, explaining the potential for personal care companies to become key information partners. “They want that data.”

Home health companies could either launch their own personal care outfits or explore partnerships with existing companies as a way to “own the patient” over time.

“For all those reasons, I love this business,” Ellis said. “I think that [personal care], married to home health, is really awesome. I think you’re going to see a lot more.”

Written by Alex Spanko

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