BrightStar Care is one of the largest home care franchises in the country, but there are also a few things about the company that make it unique.
For one, it has a senior living portfolio – made up by BrightStar Senior Living and BrightStar Care Homes – that came out of the recognition that home care clients often relied on BrightStar to provide guidance when senior living options became necessary.
It is far more invested in Medicare Advantage (MA) business than its peers, which has been a point of contention with some of its franchisees in the past. It is far more embedded in alternative home care models than some of its peers as well, namely hospital at home. It also has a partnership with Chamberlain University aimed at widening the home-based care worker pool.
Because of those wide-ranging initiatives, the company has expanded its corporate-owned footprint. It now has about 10% of its locations under corporate ownership, which allows it to test out new ideas and use cases.
For now, BrightStar remains independent. But its founder and CEO, Shelly Sun, suggested to Home Health Care News in 2022 that the company would eventually “align” itself with a larger network.
“I’ll still be at this brand 10 years from now, regardless of whether I’m sitting at the house making all the decisions, or I am an employee within a larger ecosystem staff,” Sun said at the time. “I think that over the next three to five years, we will see that opportunity to align within a payer, with a hospital network, with a Medicare home health organization. We’ll need to, because I think we need to be closer to the government-funding model.”
Sun founded BrightStar Care in 2002, and began franchising three years later. Now, the company’s portfolio includes more than 380 home care locations across the country. In addition to senior living and home care offerings, it also provides supplemental care staff to corporate clients.
By 2020, Sun had built a $500 million company. Four years later, system-wide revenue has increased to more than $650 million.
Almost three years after Sun teased a potential sale or merger, HHCN caught up with her again to discuss the future of the business.
“Many of the [larger networks] have recently done some large acquisitions, so they’re still trying to consume those,” Sun said. “So, maybe [we make that move] in the next two years, or maybe it’s in seven years. The opportunity to align depends on what the cycles kind of end up looking like.”
There have been some noteworthy acquisitions in the home care franchise world over recent years.
Honor acquired Home Instead in 2021. In the same year, Advocate Aurora Enterprises acquired Senior Helpers. And, last September, The Halifax Group acquired Comfort Keepers from Sodexo.
Notably, all of these home care franchises were acquired by different kinds of entities. Honor is a VC-backed home care technology platform; Advocate Aurora Enterprises is a part of a health system, which is Advocate Health, after Advocate Aurora and Atrium Health merged; and The Halifax Group is a private equity firm.
For BrightStar Care, Sun sees retailers and payers making the most sense, if an acquisition does come to fruition in the future.
“I think either a payer or retailer,” Sun said. “It wouldn’t be a health system, because health systems are not coast to coast. We’ve had opportunities to align with those that are regionally focused before. And it would have been a really large sale price, but I’m not motivated by the money.”
The largest payers are all invested in some way in home-based care, but not specifically personal home care delivery.
On the home health front, UnitedHealth Group (NYSE: UNH) has LHC Group, and is in the process of acquiring Amedisys (Nasdaq: AMED). Humana Inc. (NYSE: HUM) has CenterWell Home Health, too.
Humana was one of the first payers to invest in home care with SeniorBridge, but has since shut down that initiative. The company also divested the personal care assets of Kindred at Home after fully acquiring it.
Home-based care enablement services tend to be most popular among the payers, through entities like Elevance Health’s (NYSE: ELV) Carelon, for example.
A large home care network may make sense for these payers, but an acquisition would be a departure from their strategies, historically.
On the retailer front, CVS Health (NYSE: CVS) and Walgreens Boots Alliance (Nasdaq: WBA) have both altered their business plans to become more health care providers than just retailers. Best Buy (NYSE: BBY) has also entered into health care delivery, particularly through hospital-at-home initiatives.
A payer or large retailer acquiring a franchise the size of BrightStar could have significant ripple effects on the home care industry.
But it also could help BrightStar accomplish its goals, which is to care for as many seniors as possible.
“I want this brand to still be around 30 to 50 years from now,” Sun said. “And, to me, I think that’s impossible to do if we align with someone who’s not going to help us fundamentally reach more moms and dads, grandmas and grandpas. So, when we look for growth capital or a partnership, it will be with someone who can help me make the pie bigger, not just cash me out, right? Because that’s not my motivation.”
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