Private equity’s influence in home-based care and health care at large has been exaggerated. But the active health care firms still play an important role.

Pitchbook estimates that PE-backed providers represent 3.3% of the U.S. health care provider ecosystem by revenue. There are at least 73 PE-backed home-based care providers, according to Pitchbook, which represents a very small percentage of the thousands of providers out there.

I don’t have the data to back it up, but I would guess that, if insiders and outsiders were polled, their guesses on that first number would come far above 3.3%.

“It’s an estimate. We don’t have disclosed enterprise value and the revenue figures for every company,” Pitchbook Lead Healthcare Analyst Rebecca Springer told me. “But the numbers came out actually a little bit below what I was expecting. And I think it’s a number that’s worth paying attention to.”

Springer and Pitchbook data analysts took a stab at figuring out PE’s control of health care providers “to lay out pertinent, objective information in order to contribute to fact-grounded future discussion.”

The information revealed by Pitchbook this week was eye-opening. I certainly would have guessed that at least 10% of providers had PE backing, for instance.

For the home-based care space in particular, it’s a reminder that PE activity isn’t the end-all, be-all. But it’s also important to remember why PE catches so many headlines in the first place.

In this week’s exclusive, members-only HHCN+ Update, I take a closer look at the relationship between PE, home care and home health care.

Bootstrapping and funding

Pitchbook’s analysis of private equity in health care was not opinionated, and sought out to be exclusively “fact-grounded.”

But the report does come just seven months after the Biden administration released a fact sheet around “promoting competition” in health care to reduce pricing. In that fact sheet, private equity involvement in home care was specifically mentioned as a deterrent to that competition goal.

“Consolidation has also led to a rapid decline in independent physician practices, with research finding that patients of hospital-owned practices pay nearly $300 more for similar care than at independent physician practices,” the fact sheet read. “At the same time, private-equity ownership in the health care industry has ballooned, with approximately $750 billion in deals between 2010 and 2020 — in sectors including, but not limited to, physician practices, nursing homes, hospices, home care, autism treatment and travel nursing.”

The Pitchbook report, on the other hand, showed that 70% of all employed physicians are employed by hospitals; that there has not been a major PE investment in a U.S. hospital or health system since 2018; and that deal activity in both hospitals and skilled nursing facilities is near zero currently.

In home-based care, there was more private equity activity in 2020 and 2021. That’s for two obvious reasons: home-based care is considered a future-facing mode of care, and interest rates at that time – unlike now – were low.

More care will be done in the home in the future given patient preference and cost considerations.

“I think home-based care is a good example of an area that’s attractive to private equity investors because of a high level of fragmentation and demand for increased investment support, scale and increased sophistication on the operating side,” Springer said. “And the long-term tailwind that we see in home-based care, where more patients would like to be treated in the home, where there are cost savings by treating patients in the home.”

That increased level of sophistication is an argument for an influx in PE money being a good thing. For decades, home health care and home care have been mostly dominated by mom-and-pop providers.

Mom-and-pop providers are a must-have, as they often provide care in areas where large companies won’t go. But even some of the more regional providers are just recently turning into more tech-driven operators.

Whereas hospitals were awarded millions to upgrade their EMR systems years ago, for instance, home health providers were awarded nothing.

So, while more patients want to be treated at home than ever, providers are still catching up on the technology side. PE capital gives them the time, money and resources to do so.

That also allows legacy home-based care providers to be the beneficiaries of health care tailwinds, and not new “disruptors” who do have capital and technology, but don’t have experience caring for patients in the home.

It’s also worth noting that a lot of the PE activity in home-based care is through add-ons to existing platforms, or trade-offs from one PE firm to another. In those cases, that’s not “more” PE activity, per se, but just continued PE activity.

The largest deals still usually come from strategics. For instance, UnitedHealth Group’s (NYSE: UNH) $5.4 billion and $3.3 billion deals for LHC Group and Amedisys Inc. (Nasdaq: AMED), respectively.

PE platforms generally look to turn state-wide providers into regional ones, or regional providers into national ones. All things considered, home health agencies gaining more scale is probably a good thing, as home health access remains an issue for Medicare beneficiaries.

The Centers for Medicare & Medicaid Services (CMS) is reducing home health payments by the year. The agency is also scrutinizing profit in home- and community-based services (HCBS), while rate increases remain hard to come by in certain states.

All the while – outside of COVID-19 funding – home-based care providers have been forced to pull themselves up by their bootstraps over the years to modernize. Now, the government has taken some issue with providers looking for outside help via PE.

Currently, 17.3% of GDP spending right now is from health care. Health care’s proportion of PE activity overall is at about 13.8%, according to Springer.

What PE does is help set the standard for industry practices, just like home-based care’s public companies do. That’s why HHCN tracks activity closely. But, as the above numbers show, calling PE involvement in home-based care a concern – even given the bad apples – is probably a bridge too far.

“The deal activity trends in health care broadly mirror what’s going on in the rest of the industries,” Springer said. “There’s been a little bit of variation [over time], but in general, the deal activity remains the same.”

The post ‘It’s A Number That’s Worth Paying Attention To’: Understanding Private Equity’s Role In Home-Based Care appeared first on Home Health Care News.

This idea was laid out by Rebecca Springer, the lead health care analyst at Pitchbook, in a new report.

One of the key points of the report was this data point: that PE-backed providers represent less than 4% of the U.S. health care provider ecosystem by revenue, at 3.3% specifically.

PE headlines may be more eye-catching in home-based care because home health and home care are burgeoning sectors. But, overall, PE firms are still not incredibly influential across any part of the health care system.

“PE investment in health care providers is neither new nor surging,” Springer wrote in the report. “Such investment grew as a proportion of overall PE activity between 2000 and 2018 but has declined proportionally since then. Year-over-year growth in the total number of PE-backed companies has slowed steadily over the past six years, dipping below 1% in the first quarter of 2024.”

Springer added that more than 70% of all employed physicians are employed by hospitals; that there has not been a major PE investment in a U.S. hospital or health system since 2018; and that deal activity in both hospitals and skilled nursing facilities is near zero currently.

The report comes at a time when PE-driven M&A has been scrutinized by lawmakers and federal regulators in Washington, D.C.

In December, the Biden administration released a fact sheet condemning certain PE activity in the health care space, including in home-based care.

“Private-equity ownership in the health care industry has ballooned, with approximately $750 billion in deals between 2010 and 2020 – in sectors including, but not limited to, physician practices, nursing homes, hospices, home care, autism treatment and travel nursing,” the fact sheet read. “Too often, aggressive profiteering by private equity-owned practices can lead to higher patient costs and lower quality care.”

Pitchbook data shows that private equity ownership has ebbed and flowed, however.

But that stigma alone has likely played a role in slower deal activity in health care – and home-based care specifically – over the last couple of years.

“The key effect of the Biden administration’s scrutiny of PE in healthcare is not direct antitrust risk, but headline risk,” Springer wrote in a separate report earlier this year. “We have been struck by the sudden change in tone among investors on this topic. While the interest-rate environment remains the most important driver of the pace of dealmaking, we also believe sponsors will be somewhat more cautious in 2024 about entering any provider categories that primarily serve vulnerable populations, including home-based care, post-acute care, high-acuity behavioral health, intellectual & developmental disabilities (IDD) care and autism treatment.”

PE-driven dealmaking in home-based care peaked during the height of COVID-19, which makes sense. Some seniors had no choice but to be treated within their homes, and also grew to prefer that mode of care.

Since then, it has cooled. As Springer pointed out, that’s due to a variety of factors, with the biggest one being high interest rates.

Currently, there are about 73 home-based care companies backed by PE, according to Pitchbook. That represents a very small percentage of all providers. It also means that just over 10% of all PE-backed providers are operating in the home-based care space.

“Considerable confusion about the scope and emphasis of PE’s current involvement in US health care is circulating widely in news articles, white papers and even government missives,” Springer wrote. “We are not trying to address critiques of PE’s involvement in healthcare, especially regarding clinical outcomes, which would require different datasets and analytical tools than we have. Rather, as the leading provider of PE health care deal flow data, our aim in this note is to lay out pertinent, objective information in order to contribute to fact-grounded future discussion.”

The post Why Private Equity’s Involvement In Home-Based Care Is Largely Overstated appeared first on Home Health Care News.

On the Medicare-certified home health side, one factor that may have made investors hesitant to enter the space is the challenging payment landscape.

Despite this, Kaltroco — a family-owned private investment company — is attracted to home health care due to the firm’s belief in the fundamentals of the sector.

“It’s clear that the population is aging,” Kenneth Hammond, chief investment officer at Kaltroco, said during a panel discussion of Home Health Care News’ Capital + Strategy conference last month. “It is clear that treating patients in the home is an efficient and effective way to ensure good outcomes. It’s expensive to have people in hospitals who don’t need to be there. It’s expensive to have people in nursing homes who don’t need to be there. Treating people in the home is an imperative.”

Kaltroco is an investor in New Day Healthcare, a rapidly growing home health provider that serves patients in Texas, Missouri, Kansas and Illinois.

Hammond pointed out that, as a family backed investor, Kaltroco has the luxury to take a long-term view around the businesses that the firm builds.

“Our focus is on building the best scale platform we can to accommodate the way the market works,” he said. “We don’t use a ton of leverage. We think in a very long-term way, and we trust that, over time, the government will recognize the value home health brings.”

Indeed, The Halifax Group is making similar bets across the home-based care sector.

The Halifax Group is a Washington D.C.-based PE firm that focuses on lower middle-market businesses. The firm acquired the home care franchise company Comfort Keepers in 2023.

Like Medicare-certified home health, private-pay home care has its own challenges. One of the main pain points for potential investors is that billing rates continue to skyrocket.

Comfort Keepers is largely a private-pay company, but the franchise owners that are part of the network have a certain amount of autonomy when it comes to payer diversification. Allowing franchise owners – in states with favorable environments – to structure their businesses to address Medicaid or VA populations has helped ease some of the impact of this ongoing challenge.

“The government profile payer has become more attractive for many of our franchisees,” Scott Plumridge, managing partner at Halifax, said during the discussion.

Because Medicaid, for example, is still subject to the sway of policymakers, Plumridge stressed the importance of having a balanced book of business.

Aside from payment structure, The Halifax Group is focused on letting franchise owners run their business versus a more corporate-owned model.

“Over the course of our ownership period, we are already in the process of doing a U.S. re-franchising effort,” Plumridge said. “About $70 million of sales that were corporate-owned under previous ownership, we’re going to return those to both franchisees and we’ve got some employees who are buying locations from us. We’re [also] going to have new folks, new blood coming into our organization through acquisition to take on some of those locations. Hopefully, over the course of the next few years, you’re going to see Comfort Keepers returned to a 100% franchise business model.”

Plumridge also noted that M&A isn’t top of mind for Comfort Keepers. Instead, the company sees a huge opportunity for organic growth within its existing portfolio of assets.

On its end, Kaltroco believes that Medicare Advantage (MA) has become a big factor when it comes to investing in home health care.

“The way we’ve approached the skilled [home health] business is we have tried to acknowledge the reality that Medicare Advantage is a growing piece of the population,” Hammond said. “We need to have a solution that deals with that reality. We’re in a world where the businesses we see being sold are packaged around the idea that they have a very large FFS population as a credential. When I look at those businesses, I don’t tend to agree. I think you’ve built a business that can’t grow. Over the next 10 years, it’s going to be imperative that really good skilled home health businesses can execute in an MA landscape.”

For context, 30.8 million people are enrolled in a Medicare Advantage plan as of 2023. This is more than half of the eligible Medicare population, according to data from KFF.

Ultimately, Hammond is doubling down on home health as an area of continued investment for Kaltroco.

“Building a business that serves a population that needs to be served — that’s a big focus for us as a family-backed organization,” he said.

The post PE Sponsors Of Comfort Keepers, New Day Healthcare Are In Home-Based Care For The Long Haul appeared first on Home Health Care News.

Three years after being acquired by Advocate Aurora Health, Senior Helpers has a new home.

The personal care company has been sold to Waud Capital, a Chicago-based middle-market private equity firm. Senior Helpers declined to disclose the transaction purchasing price.

The wheels for the acquisition began turning following Advocate Aurora’s merger with Atrium Health in 2022, Senior Helpers CEO Peter Ross told Home Health Care News.

“After Advocate and Atrium merged … they began working on a new strategic plan,” he said. “As part of that plan, they felt they’d rather work as a partner with their outside assets, [instead of] actually owning them. They made the decision, and Senior Helpers was one of those outside assets.”

Maryland-based Senior Helpers is a home care company that operates over 380 franchise locations in the U.S., Canada and Australia. Senior Helpers is one of the largest franchise companies in the home care space. In fact, the company earned the #172 spot on Entrepreneur’s 45th annual Franchise 500 rankings this year.

Once the decision to go to market was finalized, Advocate Aurora got the ball rolling quickly.

“Once they selected a banker in May of last year, the books were put together,” Ross said. “We went out to market, I think, in August. The books went out, initial bids came in, interest came in, and then management presentations were scheduled. We went through that in late September, early October. Then final bids and final candidates came in the November, early December timeframe. Then the final buyer was selected, probably in that mid- to late-December timeframe. Then came the final parts of due diligence, and everything else, before we got to yesterday’s closing.”

Ross pointed out that when it comes to acquisitions, the Waud Capital transaction isn’t Senior Helpers first rodeo. Before being purchased by Advocate Aurora, Senior Helpers was owned by the private equity firm Altaris Capital.

“The difference between the prior sales was that Advocate Aurora was the only strategic [buyer] that we’ve ever sold to,” Ross said. “The others, including this recent one to Waud Capital, have all been private equity firms, so the process is very similar.”

Though under a new owner, Senior Helpers will maintain a relationship with Advocate Aurora.

“Their decision to sell Senior Helpers with a decision of partner versus ownership, so we’re going to continue that,” Ross said. “When you’re part of a large health system — and I think Advocate would admit this as well — it’s not as easy as it sounds. There’s a lot of people that you have to educate within the health system, there’s a lot of layers to that. Navigating a large health system, it took more time, more patience. We did make some good inroads in some of the collaborations we did, it just didn’t happen as quickly as some of us hoped. At this point, we have a really good working relationship with Advocate’s care teams in the markets we’re in.”

Additionally, Senior Helpers believes that the company fits into Waud Capital’s overall ecosystem. The PE firm is no stranger to the post-acute care sector.

Waud Capital’s portfolio includes companies like Concierge Home Care, CarePoint Partners and PromptCare.

“[Waud Capital is] very focused on health care,” Ross said. “They’re looking at new avenues and service lines that can really help to expand Senior Helpers even further. They’re also very well-capitalized as a private equity firm. They’re really bringing a lot to bear for their resources and their capital to see what else Senior Helpers can be doing, what other types of business lines we can get into, to really help to grow. We’ve had significant growth over the course of our history, which is why we’ve been acquired four times.”

Though Senior Helpers’ time under Advocate Aurora was shorter than the company anticipated, Ross appreciates their time with the health system, and is excited for its next chapter with Waud Capital.

“I do really appreciate all that Advocate did for Senior Helpers, but we are energized for our next chapter with Waud Capital,” he said. “The team is energized, and our system is energized.”

The post New Service Lines, More Growth: What’s Next For Senior Helpers Under Waud Capital appeared first on Home Health Care News.

Announced Tuesday, the firm is acquiring the McKinney, Texas-based Angels of Care from Varsity Healthcare Partners.

“I am extremely grateful to the entire VHP team for their extensive capital, operational and strategic support, which was instrumental in enhancing the growth and success of AOC during our partnership,” Angels of Care CEO Jessica Riggs said in a statement.

Angels of Care providers private-duty nursing, skilled nursing, respite care and a range of therapy services in the home to medically complex children and young adults. The company employs more than 2,000 private-duty nurses, skilled nurses, physical therapists, speech therapists, attendants and specialists.

Its footprint currently spans Texas, Colorado, North Carolina, South Carolina, Florida, Arizona and Pennsylvania. That reach grew from two states to seven states under Varsity Healthcare Partners’ watch, which began in 2019.

In comes Nautic Partners, which already has home health assets in its portfolio. It is one of the backers of the April Anthony-led VitalCaring, along with The Vistria Group.

Based in Providence, Rhode Island, Nautic Partners is a middle-market private equity firm with three major industry focuses, one of which is health care.

The company has historically invested in community-based health care providers, including those in behavioral health, primary care and post-acute management. It also backs Integrated Home Care Services (IHCS).

Private equity dealmaking has been slow in home-based care over the last couple of years, after a surge in 2020 and 2021. But most experts are expecting it to tick up in 2024, particularly if interest rates come down.

Terms of the Angels of Care deal were not disclosed. Angels of Care and Nautic Partners could not be reached for comment prior to the publishing of this story.

The post Nautic Partners Scoops Up Home Health Provider Angels of Care appeared first on Home Health Care News.

Backed by the PE firm KKR, BrightSpring originally planned to raise $800 million in an IPO. In November of 2022, it ultimately decided against that course of action.

Now, an IPO – this time with a goal of raising $1 billion – is back in play. Bloomberg first reported the news, citing “people familiar with the matter.” The listing is expected to come to fruition in the fourth quarter.

BrightSpring has “re-engaged” Goldman Sachs and KKR’s capital markets division as lead bookrunners for the offering. Specifics and plans surrounding the IPO are not 100% ironed out yet, according to Bloomberg’s sources.

Based in Louisville, Kentucky, BrightSpring serves 350,000 senior and specialty patients daily in all 50 states. The company’s focus is on high-risk, high-need populations. Its patients have an average of 6 chronic conditions, according to the company. It provides 120 million hours of care per year, 75% of which is done so in the home.

In 2019, when KKR closed on its $1.32 billion purchase of BrightSpring, the latter merged with the pharmacy company PharMerica. At the time, the two companies had combined revenues of about $4.5 billion.

In 2021, BrightSpring acquired the home health and hospice company Abode Healthcare for $750 million.

In addition to KKR, Walgreens Boots Alliance (Nasdaq: WBA) – one of the retailers most involved with home-based care these days – is also a BrightSpring backer.

BrightSpring declined to comment on that matter.

Going public in home-based care

BrightSpring is a diversified home-based care services provider. After the onset of COVID-19, similar companies were performing very well on the public market. There were also rumors of several other privately held companies considering IPOs given the care-to-home trend taking place across the U.S.

Since then, the public market has mostly been hard on providers, particularly for those involved in home health and hospice.

LHC Group exited after UnitedHealth Group’s (NYSE: UNH) Optum acquired it in a deal that was finalized in early 2023. Now, Amedisys Inc. (Nasdaq: AMED) is also set to exit the public market to join Optum, so long as the deal clears regulatory hurdles.

Amedisys ultimately decided to sell due to multiple factors affecting its financial performance. Those factors include the Centers for Medicare & Medicaid Services (CMS) slashing home health payment, as well as the growing population of Medicare Advantage (MA) beneficiaries. MA plans generally pay far less for home health services than traditional Medicare does.

Enhabit Inc. (NYSE: EHAB) – another large home health and hospice provider – is currently conducting a strategic review that could result in a merger or sale. The company’s IPO only took place a little over a year ago, in June of 2022.

Reimbursement challenges aren’t just isolated to Medicare. In Medicaid, most states have begun paying more for home- and community-based services (HCBS). A recent proposed rule from CMS could also significantly affect public companies in that space, however.

HCBS providers could be forced to direct 80% of reimbursement to workers, which could be problematic, especially in markets where reimbursement is already lower than the national average.

Nevertheless, KKR and BrightSpring seem to be set on making that entrance onto the public market. Its diverse set of service lines could be enough to insulate it from regulatory and reimbursement challenges in one area or another, but that will remain unclear until the IPO is official.

The post Home-Based Care Provider BrightSpring Health Services Again Eyeing IPO appeared first on Home Health Care News.

Its investments back that up. Over the years, the company has built a diverse portfolio of home-based care assets that include home health and home care providers, vendors and a management services company.

Specifically, those assets include Help at Home, Mission Healthcare, Medalogix, Tango, St. Croix Hospice and VitalCaring, among others.

Home Health Care News recently caught up with David Schuppan, senior partner and co-head of health care at The Vistria Group, to talk about his company’s strategy, market headwinds and tailwinds, and the new home-based care “superpowers.”

The below conversation is edited for length, clarity and style.

HHCN: In your position, are you noticing any trends in the home health investment space?

Schuppan: From a high level, I don’t think any of them are novel.

Reimbursement, labor, cost of capital, regulation are all very different — not always in a good way — relative to what they have been for the past decade. All of those are making it more challenging to build your business and, naturally, they are having a chilling effect on new investment and M&A until providers better understand and adapt to this new normal. 

In your view, what are some of the key tailwinds that factor into the current home health investment space?

There are the trends demographically. Volume is immensely favorable for the populations that we treat. The site of service — the home — still remains the most favorable. 

Despite the difficulties, those are long-term secular winners, at least from an investment perspective. The dislocation that is caused by those four macro trends that I mentioned is also creating more opportunity now, but the risk and the thoughtfulness before pursuing them have both gone up immeasurably.

I think that’s why you’re starting to see deal flow fall off.

On the flip side, what are some of the other key headwinds that factor into the current home health investment space?

One that I haven’t mentioned is that you now have two emerging superpowers in home health — UnitedHealth Group (NYSE: UNH) and Humana Inc. (NYSE: HUM).

The rest of the home health industry will need to better define and differentiate themselves with respect to market positioning, growth priorities, culture and outcomes, given the inherent scale, scope and capital advantages those larger entities possess.

That said, our experience would say that there’s always a strong opportunity for middle-market providers to thrive in this type of environment. Given the industry challenges over the past year, the interesting question for all of us is — who will those middle-market providers be?     

What kind of investment windows does Vistria have with its home health assets? The typical 3-5 years, or are these longer-term plays?

We tend to focus less on the timeframe and more about the company’s specific goals, whether those be economic or impact related, and the achievement of those goals, when the environment is, let’s say, more conducive to achieving them.

I think you’ve seen a lot of folks build and have liquidity in three years. My sense is that’s going to extend pretty materially, given the environment is more complex. We don’t try to handicap or put a timeframe on it.

We’ve seen your company invest on the home health on the provider side, and then with Medalogix on the clinical intelligence, data and software side of the industry. What other pieces of the puzzle do you guys have your eye on?

We’re big fans of taking a 360-view of supporting this site of service. We fundamentally believe that this is where people prefer to be and where value is created.

In addition to care provision, and skilled post-acute, as well as hospice and long-term support, we’ve also invested pretty significantly in what I’ll call the support services, or enabling services.

We’ve invested in risk enablement, through Tango, which is focused on helping improve access and value of in-home care, which is obviously a very important topic for those that pay for care, but also those who provide it and receive it.

We think that pharmacy is an underappreciated component of this. Most of the individuals we care for are polychronic. Retail and mail is not a great way to help them optimize their pharmacy use. We have a business called HomeFree Pharmacy that works with providers to provide integrated long-term care pharmacy at home.

We don’t brag about it enough, but Vistria Group, through our knowledge and learning services group, is one of the largest job creators of in-home talent, whether it be nurses, therapy, etc. Every one of our companies has a labor opportunity. We’re very fortunate to have specialists that help us either with training, or with actual creation of labor. Our education team is our secret sauce.

That 360-view allows us to, hopefully, be more intelligent about where we spend time, but more importantly, help the people that we are partnered with more effectively.

Vistria has a ton of interesting portfolio companies beyond home health, too. Behavioral health is well represented, for instance, with portfolio companies like Sevita, Beacon and Behavioral Health Group. Does having an in at those organizations benefit your work in home health at all? 

Not every company can do everything, so having partners that are willing to help you pilot, or do things that are not always natural, we found is immensely valuable.

The building blocks to value are not just medical and non-medical in-home care, but they’re also behavioral, they’re social, they’re pharma-related. Having partners, or best-in-class platforms, helps us collaborate towards a common solution where we can also leverage or capitalize on our relationships with those risk-bearing entities, whether those be health plans, ACOs or enablers.

Home health is an enduring business. It goes through cycles. We’re going to be here for a long time.

The post ‘We’re Going To Be Here For A Long Time’: Inside The Vistria Group’s Home-Focused Investment Strategy appeared first on Home Health Care News.

The company was first unveiled in early August. It was created in conjunction with Havencrest’s acquisition of For Papa’s Sake Home Care, which is a personal home care provider in the Chicagoland area.

Avid Health at Home is an example of a platform creation, an increasingly popular way for private equity companies to get into home-based care without significant risk.

Tabbed to lead Avid Health at Home is Havencrest Operating Partner Jennifer Lentz, who will serve as Avid Health at Home’s CEO. Lentz was a longtime veteran of Premier Home Health Care Services, where she worked her way up to COO.

“I just believe home care has got such a tremendous future in U.S. health care delivery,” Lentz told Home Health Care News. “It feels fantastic to be able to lead a team of qualified, amazing individuals that I am starting to get to know really well. I’m excited about the opportunity and really thrilled to continue to take care of our seniors.”

While Havencrest did look at larger companies to acquire as the foundation of the new venture, For Papa’s Home Care ultimately made the most sense given its size and quality, Lentz told Home Health Care News.

“What we found was that it would be harder to go in and really change [things], when it comes to being tech-enabled, when it comes to best practices and policies,” she said. “We weren’t really too excited about some of the things we had looked at. So we opted to pivot and go for the platform, looking for smaller, quality agencies – that really have a unique perspective on the communities that they serve – to bring them up into the larger entity.”

Part of the reasoning behind acquiring a smaller agency at first, and then expanding, is that Lentz and her team did want to build a new type of home care provider.

They want Avid Health at Home to be tech- and data-driven, first and foremost.

“Data transmission from the home being first and foremost,” Lentz said. “We want to be really looking at what’s happening with our clients in their homes, and then be able to leverage that.”

In the future, the company wants to work with home health and hospice providers to help curb readmissions and ED utilization.

Proving its capabilities – for provider and payer partnerships – is front of mind from Day One, Lentz said.

Next, however, is M&A. The company is looking to “aggressively roll up acquisitions.” Those transactions could take place anywhere – but sights are set on the Midwest, Mid-Atlantic and Mountain West regions.

Another consideration is the self-directed or family caregiver model that’s gaining more popularity in the U.S. Lentz sees that as an area that home care providers will have to be proficient in moving forward.

“I think it’s critical for a home care company to consider it as a revenue stream, and as a part of your service delivery model,” she said. “You have to be both, you have to be able to balance out, because people are going to need you whether you have an agency staff member or whether you’re helping to support a family member under the Medicaid program.”

The post The PE-Backed Avid Health at Home Has Lofty Goals From The Get-Go appeared first on Home Health Care News.

Messina now finds himself leading another organization.

The Franklin, Tennessee-based Regent Surgical Health announced Monday that Messina has been named the company’s new CEO while also being appointed to its board of directors. He takes over for Interim CEO and Executive Chairman Joe Clark, who remains on Regent’s board.

“[Messina] brings a unique blend of visionary thinking, entrepreneurial prowess and deep experience forming successful partnerships with some of the nation’s leading health systems,” Clark said in a statement.

Specifically, Messina’s skill set will support Regent in the company’s goals of moving into new markets and deepening its strategic relationships, Clark added.

Regent’s business model revolves around partnering with hospitals and physicians to develop, own and manage ambulatory surgery centers (ASCs). Founded in 2001, the company currently operates and manages ASC locations in more than 15 states.

In 2021, Regent completed a strategic investment from TowerBrook Capital Partners, an international investment management firm, along with Ascension Capital. TowerBrook and Ascension are also the backers of Compassus in the home-based care world.

“Continuing on my prior experiences at Contessa of partnering with health systems to appropriately offer patients more services on an outpatient basis is extremely exciting,” Messina wrote in a LinkedIn post. “I look forward to being on the team that works alongside our health system, physician and payer partners to bring this outstanding care to communities across the country.”

In between Messina co-founding Contessa and him leaving the company, it was acquired by home health and hospice provider Amedisys Inc. (Nasdaq: AMED) for $250 million.

Prior to Contessa, Messina was the chief investment officer for Martin Ventures and the vice president of development for Vanguard Health Systems.

The post Contessa Co-Founder Travis Messina Takes Over as CEO of Regent Surgical Health appeared first on Home Health Care News.

The new company will be dubbed “Avid Health at Home,” and Havencrest Operating Partner Jen Lentz will be the CEO.

“We are very excited about the creation of Avid as well as our partnership with FPS,” Christopher W. Kersey, founding managing partner of Havencrest, said in a statement. “With Jen’s leadership and her successful operating track record in the post-acute care marketspace, our investment in FPS represents a strategic entry point into home care and will allow Avid to establish market leadership and expand access to quality care for patients across the Chicago market.”

Based in Dallas, Havencrest is a health care-focused private equity fund with about $600 million of assets under management. The company’s strategic approach is to partner with founder-owned health care companies with EBITDA between $3 million and $15 million.

For Papa’s Sake Home Care fits the bill. Founded in 2011, the company provides home care services to the broader Chicagoland area.

“At Avid, our goal is to establish a platform that provides quality person-to-person care that leverages industry best practices as well as innovative technology,” Lentz said in a statement. “Havencrest is the catalyst to achieve that goal through our shared vision of expanding the critical role that home care plays in the larger health care delivery system.”

The plan is to begin expanding immediately. Avid is “actively exploring new acquisition opportunities” across the Midwest, Mid-Atlantic and Mountain West geographies.

Ultimately, Avid hopes to be a successful home care platform, but also a disrupter.

“We believe there is significant opportunity to innovate in home care through a focus on technology, training and quality measures,” Jett Aubrey, principal of Havencrest, said in a statement. “Home care is increasingly demanding a bigger seat at the post-acute table, and we believe that Avid is positioned to be that provider of choice for patients, providers and payers.”

Private equity involvement in home-based care has slowed of late due to macro economic factors.

But the platform formula – where PE firms hand the keys to an in-house leader – is an emerging trend.

Waud Capital recently put $100 million behind two home-based care veterans to build a home-based care company, for instance. 

“Models like that, which are going to allow firms to take advantage of a little bit better pricing on smaller agencies, while still putting capital to work without having to do big platform deals – we’re going to see a lot of that,” Rebecca Springer, senior health care analyst at Pitchbook, told HHCN in February.

The post PE Firm Havencrest Forms Home Care Platform ‘Avid Health at Home,’ Plans To Rapidly Expand appeared first on Home Health Care News.