Outside Of A Few Busy Providers, Home-Based Care Dealmaking Remained Slow In Third Quarter

Dealmaking remained relatively quiet in home health, home care and hospice in the third quarter. A variety of trends – both micro and macro – contributed to that.

Overall, there were 25 total deals reported, according to data from the M&A firm The Braff Group.

That quarterly number is in line with the first and second quarters. It’s down significantly from 2021 highs, which is expected, but also below pre-pandemic levels.


“We’ve previously reported that the mergers and acquisitions market has been in a prolonged slowdown since the end of 2022,” The Braff Group wrote in its quarterly report. “Early in the year, we were cautiously optimistic that we might begin to see the beginnings of a rebound in the second half of 2023. But with the Fed not ruling out additional rate hikes and fears of a recession, though less acute, nevertheless lingering, buyers are still largely playing it safe by not playing at all.”

Therefore, while it’s likely that proposed rules are playing a part in stagnant dealmaking – both in home health care and home- and community-based services (HCBS) – macroeconomic trends may be playing an even larger factor.

Private equity dealmaking overall also remained down, for instance.


“Perhaps the most important thing to note in the data is the overall consistency of the patterns among the sectors,” The Braff Group noted. “A quiet Q2 2020 when COVID struck. A pick-up in deal flow in the third and fourth quarters of 2020. A remarkable 2021 fueled by cheap debt, pent-up demand and the emergence from lockdowns. A strong start to 2022, due in part to overhang from 2021. And a fall-off towards the end of 2022, and even a bigger pull-back in 2023, due to inflation and an increase in interest rates to tamp it down. This pattern is not constrained to health care services.”

Regardless, the home health final rule coming down in home health care should trigger more activity in Medicare-certified home health care.

In the third quarter, The Braff Group reported 12 Medicare-certified home health deals, three hospice deals, nine private-duty deals and one Medicaid-based deal.

“On the home health and hospice front, support appears to be building to eliminate reimbursement cuts proposed by CMS for Medicare-certified providers, and hospice received at 3.1% increase in rates,” The Braff Group wrote. “Most importantly, current market conditions notwithstanding, in low volume markets, the most attractive firms can still command market premiums.”

New Day Healthcare, Help at Home stay busy

As for the home-based care services providers that were acquisitive in the third quarter, New Day Healthcare and Help at Home helped lead the way.

Based in Fairview, Texas, New Day Healthcare is a relatively new – but growing – home-based care provider. Its main focus is Medicare-certified home health care, but it also providers home care and hospice.

Just last week, it acquired Pathfinder Home Health, a home health provider in Texas. Prior to that, it acquired AdvantageCare Home Health in September. The company has made eight acquisitions to date.

“Our M&A strategy is very disciplined,” New Day CEO G. Scott Herman recently told Home Health Care News. “We won’t stray from that discipline. We understand that quality companies are built from quality contributors. We don’t mind companies that need help. But we’re not really interested in large-scale turnarounds.”

Still, the company plans to remain acquisitive in the near-term future.

Meanwhile, Help at Home – a provider of home care, mostly of the HCBS variety – has continued to grow.

In August, the company the Chicago-based company announced that it had acquired the Ohio-based Berkshire Homecare and the Indiana-based My Care at Home.

“These organizations are a great fit for Help at Home and allow us to extend our service coverage within these two key states,” Help at Home COO Ray Smithberger said in a statement. “We look forward to bringing Help at Home’s innovative care coordination value proposition, enhanced caregiver support and quality services to more clients in Ohio and Indiana.”

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