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The COVID-19 pandemic delayed the ambitious plans of most home health providers. Now nearly halfway into 2021, many are picking up right where they left off, with a few key players doubling down on innovation and betting big on the future of home-based care.
There are plenty “home health providers to watch” as the rest of this year plays out. Initially, Home Health Care News wanted to shine a light on just five of them, but that task proved nearly impossible.
The home health powerhouses on this list are worth following for a variety of reasons, whether that’s due to their forthcoming organizational changes, recent industry-shaping acquisitions or attention-grabbing growth strategies. While the following companies are very different in terms size, services and ownership structures, they share two key commonalities: a willingness to take chances and a commitment to improving senior care in the U.S.
Aveanna Healthcare Holdings Inc. (Nasdaq: AVAH) has historically focused on caring for complex pediatric patients in the home, but it recently unveiled plans to invest more heavily around senior care as part of its IPO process.
If it successfully executes on that mission, it could potentially disrupt the existing home health market, which is currently dominated by Kindred at Home, Amedisys Inc. (Nasdaq: AMED), LHC Group Inc. (Nasdaq: LHCG) and a handful of other large, well-resourced providers.
“We believe that we have the opportunity to leverage our national home health infrastructure to develop an industry leading adult home health and hospice business similar in size and scale to our pediatric home health business,” the Atlanta-based Aveanna reported in an S-1 financial filing. “We believe this long-term expansion strategy in adult end markets through de novo expansion and acquisitions will provide Aveanna with a highly distinctive profile as compared to its home health peers, with more diversified reimbursement sources, a lower risk profile and a broader set of organic and inorganic growth avenues to pursue opportunistically.”
Today, that “home health infrastructure” spans 30 states and nearly 250 locations. Despite predominantly operating in the very difficult pediatric home health space, Aveanna has grown its revenue from roughly $324.6 million to about $1.5 billion over the past five years, giving it plenty of firepower moving forward.
Becoming a bigger senior care home health player likely won’t be easy for Aveanna, however.
For starters, caring for seniors is very different than caring for critically ill and medically complex children, both in terms of clinician skill sets and equipment. Additionally, Aveanna leadership has suggested the company plans on maintaining its pediatric home health business as it simultaneously expands into senior care, which could end up challenging considering the worsening health care labor crunch.
In April, home health employment numbers contracted by about 6,700 jobs, according to preliminary data from the U.S. Department of Labor. Community care facilities for the elderly and other residential care facilities likewise lost jobs.
On top of all that, Aveanna will have to recover from a somewhat rocky market debut. After going public at the end of April, the company’s stock has yet to rise above its initial offering price of $12 per share.
Yet even with those hurdles to overcome, the adult home health market offers more upside and stability than the pediatric space, especially with the full might of the “silver tsunami” looming.
“Adult home health and hospice are natural extensions of Aveanna’s core home health infrastructure,” the S-1 continued. “In particular, the adult home health business leverages our platform infrastructure and core competencies in clinical program management, automated and efficient nurse recruitment, technology-driven revenue cycle management, payer contracting and entry into new geographic markets.”
CenterWell Home Health
Haven’t heard of CenterWell Home Health before? Well, that’s probably because it doesn’t exist yet.
“CenterWell Home Health” is the heir apparent of Kindred at Home, the new identity for the home health giant once Humana Inc. (NYSE: HUM) gains 100% control of the business from private equity sponsors TPG Capital and Welsh, Carson, Anderson & Stowe (WCAS). Humana already owns a 40% stake of Kindred, but it’s currently in the midst of acquiring the remainder for a cool $5.7 billion.
While Kindred is far from the only home-based care tool in Humana’s toolbox, it has the potential to be the most impactful. The provider has locations in 40 states, employing roughly 43,000 caregivers who deliver home health, hospice and community-based services to more than 550,000 patients annually.
CenterWell Home Health is arguably a provider to watch because of its size alone. Yet it’s what Humana leadership has said about the business since the takeover news broke that makes it so interesting.
Gaining a minority stake in Kindred back in 2018 allowed Humana to experiment with Kindred and formulate a plan for shifting services away from traditional fee-for-service payment models. The insurer is confident it has mapped out a path for doing just that, propelled by its standing as a top Medicare Advantage organization and one of just 53 direct-contracting entities (DCEs).
“Fully integrating Kindred at Home will enable us to more closely align incentives to focus on improving patient outcomes and reducing the total cost of care,” Humana CEO Bruce Broussard said during the Louisville, Kentucky-based company’s first-quarter earnings call. “This is critical to deploying, at scale, a value-based, advanced home health model that makes it easier for patients and providers to benefit from our full continuum of home-based capabilities.”
Humana’s takeover of Kindred at Home is expected to close during the third quarter. Once that happens, Humana will rebrand Kindred to CenterWell while offloading its hospice and personal care services operations.
It will then accelerate CenterWell’s participation in value-based care arrangements, intertwining it with in-home urgent care, acute care and primary care services as needed.
“In some ways, I think Humana is trying to build out an Optum-like payer-agnostic model, hence the rebranding to CenterWell, which they can sell to members outside of their respective MA membership base,” Eugene Goldenberg, a managing director at Edgemont Partners, previously told HHCN.
CenterWell is positioned to be a boon for Humana, but it could also pave the way for other home health providers looking to migrate away from fee for service.
“We’ve recognized for some time that the current volume-based, fee-for-service model has limited the innovation in home health,” Broussard noted during the Q1 call.
AccentCare, BrightSpring Health Services
AccentCare Inc. and BrightSpring Health Services are two highly diversified in-home care companies that have made plenty of headlines over the past few years. Yet it’s what might happen in the not-so-distant future that makes them both home health providers to watch.
Formerly known as ResCare, BrightSpring is one of the largest providers of home- and community-based services (HCBS) in the U.S. The company — backed by KKR and an affiliate of Walgreens Boots Alliance — has been increasingly active in the home health space, with its most recent acquisition being Abode Hospice and Home Health.
Broadly, Louisville-based BrightSpring has sought to distinguish itself with its “three-legs-of-the-stool” strategy centered around home health for medical needs, personal care for support with activities of daily living (ADLs) and pharmacy services for ongoing medication management.
“We certainly have a unique platform, and we’re hopeful that it will be beneficial in the future,” BrightSpring President and CEO Jon Rousseau told HHCN in its 2020 “Changemakers” series. “Our platform is centered around offering multiple essential services that we think are all required to optimally and holistically treat an individual with high needs, somebody with significant acute and/or chronic needs.”
Meanwhile, Dallas-based AccentCare — owned by global PE firm Advent International — was already one of the biggest home health providers in the country going into 2020. In December of last year, it merged with Seasons Hospice & Palliative Care, making it one of the five largest hospice providers as well.
The combined AccentCare-Seasons enterprise operates over 225 sites of care across 26 states, employing nearly 30,000 workers. It has more than 60 total partnerships with health systems and physician practices.
AccentCare and BrightSpring are worth watching as things stand today, but some industry insiders have speculated that either may seek to go public within the next 12 to 18 months. Public market multiples are currently through the roof, with the demand for home health care only projected to increase.
Neither AccentCare nor BrightSpring needs to go public, but the opportunity may be too attractive to pass up. For what it’s worth, Help At Home is also seen as a potential candidate to go public by market experts.
As far as stacking up against other publicly traded companies, AccentCare would fall somewhere between LHC Group and Encompass Health Corp. (NYSE: EHC) in terms of annual revenues.
“Let’s just say we’ll be fast approaching that general size and breadth,” AccentCare CEO Steve Rodgers told HHCN when the Seasons deal was first announced.
HCA Healthcare, Encompass Health
HCA Healthcare Inc. (NYSE: HCA) and Encompass Health are also home health providers to watch for similar reasons, though the former isn’t technically even in the home health space yet.
In February, HCA revealed that it’s buying 80% of Brookdale Senior Living Inc.’s (NYSE: BKD) home health and hospice segment for $400 million. Across its footprint, the Nashville, Tennessee-based HCA Healthcare runs more than 180 hospitals and 2,000 sites of care, but it currently does not have a home health presence.
A couple months earlier, Encompass Health announced it was “exploring strategic alternatives” for its home health and hospice business, including a possible sale or spinoff. Shortly after that news broke, April Anthony, CEO of the company’s home health and hospice segment, announced she planned to step down from her post in June.
Encompass Health hasn’t settled on which alternative it’s taking, at least not publicly. Reports placed the company’s corporate jet in Rhode Island at various points in 2021, however, leading some to speculate about a possible deal involving CVS Health (NYSE: CVS).
Brookdale and Encompass Health are home health leviathans. The sheer amount of change happening with those organizations right now make them ones to watch over the next few quarters.
Lifesprk solidified a spot on this list just earlier this week, when the Minnesota-based senior care provider outlined plans to acquire Tealwood Senior Living.
The move is extremely unique, as few in-home care providers have aggressively gone after real estate-based complements to their business. It’s also classically “Lifesprk-ian,” which has made a name for itself thanks to its willingness to take risks and its payer-agnostic, setting-agnostic approach to senior care.
Founded in 2004, Lifesprk’s services include home health, hospice, palliative care, primary care and more. After acquiring Tealwood, it will also run 35 senior living communities located across Minnesota and Wisconsin, plus a handful of skilled nursing facilities (SNFs).
“There’s a lot of segregation in [senior living],” Lifesprk CEO Joel Theisen told HHCN. “There’s a lot of opportunity. We felt like the same issues around the broken health care system were plaguing those populations, so we did make an active effort to start thinking about, ‘Man, we should really probably do the full property management.’”
Lifesprk will also receive real estate interest as part of the deal.
Dr. Bill Thomas — Lifesprk’s chief independence officer — and other senior care leaders have repeatedly called for a revisioning of the traditional senior living community. Lifesprk’s interest in Tealwood is a step in that direction.
Following the deal, Tealwood will fall under the “Lifesprk Senior Living” brand. Integration is already underway, with Lifesprk currently hunting for its next senior living contracts and properties.
If Lifesprk finds success in a hybrid home health-senior living model, it could inspire other companies to launch similar efforts. Home care franchise company BrightStar Care is among the only other in-home care players to seriously invest in the senior living space.
As of September, BrightStar had multiple communities in Wisconsin, Indiana and Ohio. Originally, BrightStar decided to start buying land to build senior living spaces for its patients who were beginning to have higher-acuity needs.
“Families wanted to be able to move their loved ones out of the home to something with more socialization, and they were looking for recommendations from us for assisted living, dementia and memory care communities in their area,” BrightStar Care founder and CEO Shelly Sun said at the 2020 HHCN FUTURE conference.