How the Amedisys-Contessa Roadmap Has Changed Since the Acquisition Last Year

When Amedisys Inc. (Nasdaq: AMED) purchased Contessa Health, it touted the acquistion as a future-facing move that would allow the company to care for patients across the continuum. 

The company’s leaders knew it would be a near-term drag, and some analysts and home health insiders scratched their heads. Still, Amedisys reiterated the opportunity it saw in purchasing a provider of high-acuity care services in the home.

But almost a year out from the official transaction date, the company’s tune has changed. Now, its leaders are moving forward considering Contessa Health – and high-acuity care in the home – a core part of their business. 


“I think it’s safe to say that Contessa [on its own] was going to have a good run on hospital joint ventures, particularly around more regional and smaller-market hospitals,” Amedisys CEO Chris Gerard said during William Blair’s 42nd Annual Growth Stock Conference Monday. “And then Amedisys was going to probably have a handful of joint ventures added on a day-in-and-day-out basis, but not really as a part of our core business. But now, we have such an offering that the hospital systems are really wanting to form a deep relationship with us so that they can optimize their beds.”

Between Contessa’s capabilities – hospital-at-home, SNF-at-home and palliative care services – and Amedisys traditional home health and hospice capabilities, the two now have an intriguing value add for hospitals moving into a new health care ecosystem. 

Hospitals are looking to be able to unload patients to the home to optimize their bed space, but also, they aren’t traditionally good at providing home health and hospice care on their own, Gerard added.


Those combined capabilities have taken taken conversations with lower-level health systems, and brought them up to a new level.

“That was kind of the nature of the joint ventures that we had in place prior to Contessa,” Gerard said. “But what we’ve seen happen now is … some super large urban cities have these large health systems that want to provide the full continuum of care, and they want to leverage capabilities from hospital at home to end-of-life care in the home.”

So, though Amedisys foresaw Contessa as being a future driver of revenue for the company – but maybe further down the line – it’s the hospitals’ change in thinking that may be what really starts to unlock value in the partnership.

For context, Amedisys previously has said that it hoped Contessa would be a positive profit driver by 2023.

“We’ve already had a couple of these close since the acquisition, with hospital systems starting to come to us with larger kind of arrangements or relationships in mind, wanting to put in their home health and hospice assets along with the joint venture with Contessa,” Gerard said.

Even after less than a year of Contessa being imbedded into Amedisys, the path forward has already changed a bit internally.

“We think we’ll be announcing some broader-based joint ventures in the very near future that I would say were not part of our roadmap prior to the acquisition of Contessa,” Gerard said.

Consolidation outlook

Amedisys is still ready to ride the wave of consolidation that top home health providers have said is coming for years.

“This industry, at some point, will need to consolidate and really get to where there are fewer players out there, with more scale, that are able to handle the volumes that are coming our way,” Gerard said. “It would create a better regulatory environment for us as well.”

Like many other experts in the field, Amedisys leaders are also expecting a delayed effect from the onset of the Patient-Driven Groupings Model (PDGM) as well as COVID-19.

To some extent, government funding enabled smaller providers to mask their struggles over the past few years.

“We think that has really put a lot of pressure on organizations,” Amedisys CFO Scott Ginn said. “We think it will pick up here, but it has been a little slower than we thought.”

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