LHC Group and Almost Family finalized their merger, creating the second-largest home health provider in the country with 781 locations in 36 states, more than 31,000 employees and revenue of $1.8 billion.
The deal, which was completed last week, signifies the increasing value of coordinating home health and post-acute services. The all-stock “merger of equals” will position the combined company to take on more risk through value-based payment models and attract workers that are in high demand, but low supply, executives said. It can now partner with more hospitals, and extend its reach to about 60% of the population.
Almost Family has a controlling interest in Imperium Health, an accountable care organization that helps health systems manage their own ACOs. Almost Family also specializes in recruiting and retaining personal care workers, said Keith Myers co-founder, chairman and CEO of LHC Group.
“It accelerates our strategy to put advanced practice nurses in patients’ homes, which will help reduce readmissions and admissions to hospitals,” said Myers, adding that the merger will satisfy demand to better manage the dual-eligible population through personal care services.
“Sometimes it’s more of a social issue where the patient is ready to go home but the family members are afraid to bring them home without regular assistance,” he said. “Now we can offer personal care services in that home that are much lower cost and help the family get comfortable.”
The deal puts the combined entity behind Kindred Healthcare and its approximately $2.5 billion in annual home health revenue, according to Modern Healthcare data.
LHC Group created its first joint venture with a hospital in 1998, long before it was popular, Myers said. It initially took over home health operations for hospitals that weren’t managing them efficiently and has since expanded into hospice and long-term care as it aims to adapt to value-based models and population health, he said.
“The push to value-based care, which requires care coordination, cost tracking and outcomes management across the continuum, in many cases requires significant resources and investment in technology and personnel,” Christopher Donovan, partner at Foley & Lardner who focuses on post-acute transactions, told Modern Healthcare in November when the deal was announced. “Most of the time, this can only be accessed with a large scale and size.”