Option Care Health CEO John Rademacher: ‘Not All Home Health Assets Are Created Equal’

Option Care Health (Nasdaq: OPCH) came out on the losing end of a bidding process for Amedisys Inc. (Nasdaq: AMED) earlier this year.

The winner of that process, of course, was UnitedHealth Group’s (NYSE: UNH) Optum. That transaction is still pending, but will likely be finalized in the first half of 2024.

Before Optum came into the picture, Option Care Health leaders painted the picture of an end-end health care continuum in the home.

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Option Care Health provides home-based and alternate site infusion services in all 50 states, while Amedisys provides home health, hospice care and high-acuity care in 37 states and the District of Columbia.

“Today, we are seeing not only aging populations and growing desire for at-home health care services, but also increasing therapeutic pathways,” Option Care Health CEO John Rademacher said at the time, when Amedisys had agreed to join his company. “Importantly, by expanding beyond our existing services, we’ll be able to better meet increasing demand for alternative-site care, and we believe the combined company’s capabilities and scale will position us to capture a significant share of the market.”

Given the optimism Option Care Health leaders expressed in Amedisys’ business model at the time, the question since has been whether the company will try to get involved in home health care through other means.

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There are other, similarly large home health assets out there. Take Enhabit Inc. (NYSE: EHAB), for instance, which is currently undergoing a strategic review.

“We really thought the Amedisys was unique in its capability set,” Rademacher said on the call. “Certainly with its reach, in the star ratings, as well as some of its additional capabilities with Contessa Health and some of the other aspects of that. So, not all home health assets are created equal on that.”

Rademacher was asked about home health care in general, and not about a specific asset.

“We still believe that there is opportunity for us to play a meaningful role in the home,” Rademacher continued. “We can find ways to have better coordination of care for the patients that we serve. I think as we are looking forward, as we outlined both in my prepared comments, and in our commentary, I think in the near term, we will be looking in M&A activity closer to the core than expanding broadly into home health through that standpoint.”

Option Care Health’s net revenue checked in at $1.093.0 billion for the quarter, up 7.1% year over year.

While Amedisys was clearly the apple of Option Care Health’s eye, Rademacher did not completely slam the door on other home-based care transactions in the future.

“There’s an opportunity for us to continue to innovate and to continue to work closely through that process,” he said. “We’ll continue to evaluate opportunities that are available. We’ll continue to foster relationships where appropriate. We’re going to continue to look at things both economically and strategically, and make certain that we are ahead of the trends that are happening in the marketplace as the health care ecosystem continues to evolve.”

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