LHC Group Expands Home-Based Care Footprint With Latest Joint Venture

Just one month into the year, LHC Group (Nasdaq: LHCG) is already making progress on its 2019 goal to shift more care into the home. The home health care powerhouse on Thursday announced a new joint venture with Unity Health, resulting in shared ownership of two home health providers in Arkansas.

The move is yet another example of the Lafayette, Louisiana-based company’s broader joint venture and partnership strategy, along with its commitment to maintaining local brands.

“Our JV ‘strategy’ started back in 1998 when we partnered with our first community hospital,” CEO and Chairman Keith Myers told Home Health Care news in an email, noting that back then such partnerships were uncommon and novel. “And that first partnership started a model that now 20 years later has led to LHC Group being the leader in hospital and health system joint ventures for providing health care services in the home.”

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Today, LHC group partners with about 340 hospital and health system partners, Searcy, Arkansas-based Unity Health being the most recent. The health care provider has 438 licensed beds and more than 150 doctors specializing in areas across the board.

LHC Group expects the venture to yield annualized revenue of about $4 million that “will not materially affect its 2019 diluted earnings per share” according to a release announcing the deal.

Going forward, LHC group will oversee the operations of both Unity Health – White County Medical Center Home Health in Searcy and Unity Health – Harris Medical Center Home Health in Newport. Combined, the locations have about 50 full-time employees who care for nearly 300 patients, a number LHC Group expects to grow.

Both locations will continue providing services under the new name Unity Health | HomeCare.

Adopting and adapting local partner brands has long been part of LHC Group’s strategy, according to Myers, who called the company a “house of brands.”

“These are the names that people in the community have come to know and trust,” Myers said. “It’s not only a competitive advantage for our partner and us alike, it’s what we’ve done from the very beginning and how we truly maintain and grow existing reputations within the communities we are so fortunate to serve.”

Operating in Arkansas since 2003, LHC Group now has 43 locations there, providing home health, hospice, home- and community-based services and long-term acute care. The goal of the partnership with Unity Health is to further increase quality scores and patient well-being there, while reducing hospital readmissions and improving clinical outcomes.

“Arkansas is a Certificate-of-Need (CON) state, and while we do cover most of the state, the Unity Health partnership represents a new service area for us,” Myers said. “Every joint venture is a little unique, but they all have one thing in common for the partner hospital, agency(ies), LHC Group and the community – that of being able to more effectively and efficiently help care for more patients and families in their home or place of residence.”

Even so, any partnership comes with a great deal of commitment and work, akin to marriages, Myers said.

“With any successful marriage, things aren’t always easy and we work things out with our partners on a daily basis,” he said. “In order to be successful, you have to understand hospitals and that sector of the health care continuum. We have years of experience working with hospitals and many of our executives and operational leaders have decades of hospital and hospital leadership experience. We speak Hospital.”

The deal with Unity Health comes after a robust 2018, when LHC Group merged with Louisville, Kentucky-based Almost Family, formerly one of the biggest home health providers in the country itself. The deal created the nation’s second-largest home health care company with a combined revenue of nearly $2 billion.

Still, LHC Group’s first joint venture of 2019 is hardly a surprise. Myers hinted at the news in a recent HHCN interview.

In addition to growing home-based care, LHC Group’s other 2019 goals include pushing for more value-based purchasing and better leveraging technology tools.

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