LHC Group Inc. (Nasdaq: LHCG) is leaning even further into its joint venture strategy, a major calling card for the Lafayette, Louisiana-based home health, hospice and personal care giant.
LHC Group announced Thursday it has entered into an agreement to acquire home health and hospice assets from SSM Health, a multi-state health system based in St. Louis. In total, LHC Group — with its JV partner, Capital Region Medical Center — plans to take over two home health agencies and one hospice agency.
The terms of the deal — projected to close by June 1 — were not disclosed. Once finalized, LHC Group expects annualized revenue from the JV of about $5 million.
Broadly, the acquisition reflects LHC Group’s strategy to work with its current joint venture partners to expand service capacity and capability in key markets, CFO Josh Proffitt told Home Health Care News in an email.
The home health company is a JV partner of roughly 80 health systems representing about 350 hospitals throughout the country.
“This acquisition presented an excellent alignment with that strategy, and we see this as a great opportunity to grow our partnership with Capital Region Medical Center and provide enhanced in-home care services to more patients in Central Missouri,” Profitt said.
Capital Region Medical Center is a Jefferson City, Missouri-based full-service hospital that offers home health services. In addition to being a full-service hospital, Capital Region Medical Center operates an extensive clinic system, from urgent care centers to specialty physician practices.
SSM Health is a Catholic not-for-profit health system that serves Illinois, Missouri, Oklahoma and Wisconsin. MU Health Care is reportedly in the midst of negotiations to purchase SSM Health’s St. Mary’s Hospital in Jefferson City.
Under the agreement, LHC Group will purchase SSM’s home health and hospice agencies in Mexico and Jefferson City, Missouri. The three providers will operate under the names Central Missouri Home Health and Central Missouri Hospice, respectively.
“Talks are continuing to progress with MU Health Care regarding additional partnership opportunities, including the potential transfer of ownership of our ministries in Mid-Missouri,” Brian Westridge, media relations director for SSM Health, told the News Tribune. “As part of these discussions, we became aware that MU Health Care provides home care and hospice services through its partner, LHC Group in lieu of a direct service offering. While the other agreement is still evolving, we have now signed a definitive agreement with LHC to transfer ownership of our home care and hospice ministries in Jefferson City and Mexico.”
At the end of January, LHC Group announced it had struck a JV agreement with Unity Health, a move that resulted in shared ownership of two home health providers in Arkansas.
In February, the Louisiana company then entered into a joint venture agreement with Geisinger Home Health and Hospice, as well as AtlantiCare Home Health and Hospice, a Geisinger affiliate.
“If it’s possible, we’re more bullish on the JV strategy than we’ve been in the past, and we’ve been very bullish on it in the past,” LHC Group Chairman and CEO Keith Myers said in February during a Q4 earnings conference call with investors. “I think [we’re] more bullish because we continuously learn and improve our processes.”
LHC Group’s bump in JV activity comes as hospitals and health systems actively look for home health partners to replace, reinforce or manage their own operations.