The creation of VitalCaring – April Anthony’s latest home health venture – is drawing expected attention.
After all, Anthony is one of the biggest names in the industry. But since she stepped down from her role as CEO of the home health and hospice arm of Encompass Health Corporation (NYSE: EHC) in June 2021, she hasn’t been playing an active role in it.
“It is is definitely reinvigorating [to be back],” Anthony told Home Health Care News. “I enjoyed my 15 months or so that I took off, but my golf handicap dropped from an 8 to a 5, and then it just leveled off there – it would not get any better. So, I’m glad to get to some place where every day I can make things better. Because apparently the golf course was not that place for me.”
There’s a lot to break down about the new company, but its core strategy is unlikely to surprise industry insiders.
Instead of doing something different, Anthony is heads down on creating something battle-tested, something she knows will work. That starts with the new company’s service lines.
The Dallas-based company’s current portfolio includes home health, hospice, pediatric care and companion care. But Anthony and VitalCaring’s primary focus will be on home health and hospice services, particularly in the year ahead.
“Home health and hospice is going to be our bread and butter,” she said. “And then we’re still assessing the role that those other service lines are going to play in our future, relative to their expansion.”
Overall, the VitalCaring network has 74 locations. Most are home health care locations, while a handful are hospice and private duty. The company’s presence is primarily in Texas, Mississippi, Louisiana and Florida.
Anthony, The Vistria Group and Nautic Partners all own a third of the business. That structure gives Anthony more autonomy in the venture than at her previous stop at Encompass, where the home health company she founded eventually became a part of a much larger health system that was publicly traded.
With VitalCaring, Anthony doesn’t see an IPO in its future.
“I think [an IPO] is probably not a likely outcome in the near term,” she said. “I’ve loved being a private company CEO for a lot of years. And I think, when I look at where we are as an organization, we have a lot of opportunities to grow within our current sponsor group.”
It’s tough to forecast the long-term outcomes of the venture right now. After all, Anthony and Vital Caring’s president – Luke James – are still in the thick of rebranding locations across the Southeast.
Still, while an IPO may be unlikely, it’s safe to say both Anthony and James expect the company to perform well enough to make its PE partners money over the long run.
“But I think we also have a lot of opportunities – when it is time for this investment to mature for them – to move forward with a sponsor once again,” Anthony said. “I would anticipate that our more likely outcome is to find that right sponsor to take it to the next level after this one. But at this stage, obviously, it’s really early to answer that question. But I would anticipate that as an outcome, and certainly for me, a more desired outcome.”
James was at Encompass Health for over 17 years. Around the time the company decided to spin off the home health and hospice arm – originally founded by Anthony – he left his post.
Anthony’s presence was a major motivation for James when joining VitalCaring, as were the PE partners backing the venture.
“The private equity partners that we have here are folks that April and I both know and have a high degree of trust in,” James told HHCN. “Whether it’s a great year, or we get a bad Medicare rule that comes out, they’re the type of folks that are going to be there and believe in us, and also are in it for the long term and for the right reasons. That was a big part of it.”
For background, The Vistria Group’s portfolio includes: Help at Home, one of the largest providers of home care services in the country; Mission Healthcare, a home health and hospice provider with locations in seven Western states; Medalogix, one of the largest providers of home health and hospice software; HomeFree Pharmacy Services, which provides pharmacy and related services for chronic patients in home-based settings; and PHCN, a home health care management services company.
In addition to those companies, it also has backed multiple hospice providers and other home-based care entities.
On its end, Nautic Partners also has a history of investing in home-based care companies, including the Chicago-based Homecare Holdings.
“It’s really just about the mission of getting back into this space and into a place where we can really make a difference each and every day,” James aid. “Anytime you give up decision-making authority to other parties, it can be harder to do that. Where we’re at right now, we have the opportunity to make something better every day. And we can see the fruits of our labor almost in real time. That’s just a really rewarding place to be.”
VitalCaring’s next year
In Anthony’s over 30 years in the post-acute care business, she doesn’t believe that home health care’s value proposition has ever been more recognizable than it is right now.
That, she believes, has led the industry to an inflection point – specifically when it comes to relationships with payers.
“As a result of that, I think we’re going to see a continued expansion of how home health can be part of the solution to the global health care challenges that we face as a country,” Anthony said. “Instead of how home health can be a commodity [that payers] try to figure out how they can use as little as possible, I think we’re at this evolutionary point where home health – and hospice, for that matter – are both going to start to have an elevated view in the minds of the payers.”
In terms of relationships with those payers, both Anthony and James have already established good ones with a select few. But for right now, the company is more focused on the nuts and bolts of laying down the groundwork for a new venture.
It is undergoing a rebranding, not just on the letterheads atop the businesses it owns, but also culturally.
And even though the industry is changing, and may look different than it did even two years ago when James and Anthony were last in the thick of things, both believe what makes a great home health business has stayed largely the same.
“For all that will be different – in the tactics of how we go about serving patients, how we access those patients and the payer relationships around them – there’s also a lot of similarities that are always going to exist in the home care and hospice services business,” Anthony said. “That means our product is our people. We’re trying to figure out how we create an environment that attracts the very best people. [An environment] that provides them the very best tools, the very best resources, the most empowerment, to do their jobs. At the end of the day, … if we don’t do a good job of taking care of our people, I think all of [the rest] is sort of moving the deck chairs around on the Titanic.”
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