In the midst of the in-home care M&A resurgence, Charter Healthcare Group has made a few moves of its own. Its recent acquisitions of Heartwood Home Health & Hospice and Vitality Home Healthcare reflect its two-pronged acquisition growth strategy.
Founded in 2006, Charter is a rapidly growing PE-backed post-acute care platform company.
Lately, when it comes to dealmaking, Charter has set its sights set on smaller organizations that need additional support, especially ones that share its focus on palliative care and complex care management services, Steve J. Larkin, the company’s CEO, told Home Health Care News.
“What we’re really doing is taking these small operations, talking with ownership, talking with local leaders, and then really creating a new future about how Charter can come in and handle these complex patients,” Larkin said. “Either in a palliative setting or a complex care setting with these at-risk providers, but then being able to work with them for those that may be appropriate or eligible for end-of-life care.”
Rancho Cucamonga, California-based Charter has locations across Arizona, California, Colorado, Nevada and Utah. The company’s service lines include personal care, skilled home health care, palliative care, complex care management and hospice.
Charter’s average daily census is about 4,000 patients.
In order to fill its acquisition pipeline, Charter has also sought out agencies in geographic locations where the company has existing relationships and partnerships.
In 2020 alone, Charter has made four acquisitions. In addition to Heartwood and Vitality, those deals include Las Vegas-based St. Luke’s Home Hospice LLC and Phoenix-based Arizona Select Hospice.
Over the past two years, the company’s home health business has experienced between 10% to 15% growth on a year-over-year basis. The company’s complex care management line has seen 38% year-over-year growth, while its palliative care division has seen 50% year-over-year growth.
While its growth has been a positive, it has also come with some growing pains. Finding a sufficient supply of in-home caregivers has been particularly difficult.
“The staffing component has been a real challenge,” Larkin said. “It’s just making sure that we can find, attract and train the right people. Staffing is constantly at the forefront of our conversations within the organization — to make sure that we can care for the patients that are coming in.”
Staffing challenges have been a consistent pain point for providers. Earlier this year, 44% of surveyed providers named staffing as their top operational challenge in 2020, according to HHCN’s 2020 Outlook Survey and Report.
To address this issue, Charter created a dedicated recruitment team last year. While this has helped, the COVID-19 pandemic has only made the situation even more difficult.
“I think COVID has made it that much more difficult,” Larkin said. Now we’ve got positions that have opened up because people have to step away. This has created stress, but I’ve been very pleased with the volume of candidates that have come in, as well as with the quality of candidates that have come in.”
Charter has also relied on its reputation in states where the company is well known to bolster its recruitment efforts. On the flipside, strategic acquisitions have been key in states that are new territory for the company.
“As we continue to recruit [in] states where people may not be as familiar with Charter, we’re relying on the local reputation of these businesses that we’re acquiring,” Larkin said.
Looking ahead, Charter wants to continue filling gaps between home health and hospice. Palliative care will remain a key focus, as will complex care management service — the company’s “crown jewel.”
“There is a significant amount of people in the population who are chronic and frail, even terminal, that may not wish to be in hospice or end-of-life care services,” Larkin said. “We also know the patients that we’re caring for today are more complex and wish to be at home. Our growth strategy at Charter is to really focus on palliative care and complex care management services, making sure that we’re keeping patients out of the hospital.”
To this end, working with at-risk providers, health plans and health systems has enabled Charter to evaluate the care the company provides.
“There’s a massive need in these markets for the services that we’re providing,” Larkin said. “For us, just making sure that we’re continuing to engage with our partners, with our communities, so that we know exactly what needs to be done.”