Already a successful home health provider, Choice Health at Home is focused on acquisitions that will cement it as a company that has the full care-at-home continuum under one roof.
The company’s growth plans include launching multiple de novo sites throughout its southwestern footprint, as well as acquisitions, Choice Health at Home CEO David Jackson told Home Health Care News.
“On the M&A side, we want to continue to acquire home health, hospice and personal care,” he said. “We are also interested in joint ventures. We have a great joint venture with the University of Texas system. It gives us an opportunity to really do the transition from hospital to home. They play an active role in helping us with discharge planning, and we want to do the same for them.”
The Tyler, Texas-based Choice Health at Home is a home health, hospice, rehabilitation, and home care services provider. It operates locations across Texas, Louisiana and Oklahoma.
When it comes to ideal M&A targets, Jackson has a very clear profile of the types of companies Choice Health at Home is interested in purchasing.
“We want to see quality clinical outcome data, so our ideal target would be four stars or above,” he said. “Size matters when you’re doing acquisitions. There’s obviously a lot of upfront legal and diligence costs, so a business between $1 million and $5 million EBITDA. Usually between $5 million to $25 million in revenue is an ideal target. From an integration standpoint, those types of businesses have the processes in place, oftentimes they’ll be on software systems very similar to ours and that makes it an easier transition.”
All the service lines matter, but for now, home health care takes precedence.
“We look at all three segments, but a high-quality home health care agency will be a priority for Choice Health at Home,” Jackson said. “While we also are very interested in hospices and very interested in providing personal care, home health is central.”
Though M&A is important to the company’s growth strategy, Jackson is also exploring other growth avenues.
For instance, leaning into care delivery for congestive heart failure (CHF), chronic obstructive pulmonary disease (COPD) and geriatric psychiatry.
“There is a wave of patients that need those services,” Jackson said. “We want to invest in programs across the full spectrum of what home health can do. That will give us an advantage and growth outside of our M&A strategies. It’s an avenue that says, ‘Hey, this company is making an effort to serve people who have the same condition as me.’ If you like the color red, and you’d like to buy red clothes, you’re going to go to the place where they have red clothes.”
Looking ahead, the company is also making moves to take on more risk-based arrangements.
“We’re still somewhat in the confidentiality phase, but we have some exciting things going on with payers over the coming months,” Jackson said. “I’m excited about it, because we want to go at risk, we want the opportunity to prove the value of home health. Choice is making inroads on payer partnerships that are going to accelerate the growth of the business, and also put us in position to be successful, versus some of the challenging MA plans where they’re still paying fee-for-service, and there’s no incentive to improve quality.”
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