BrightSpring Health Services (Nasdaq: BTSG) views at-home care as the area that could drive margins back up.
In the first quarter, BrightSpring saw some mixed impact on EBITDA margin as a result of the company’s growing specialty oncology business. However, Jon Rousseau, president and CEO of BrightSpring, believes that the company is now in a stable position. He expects to see the margin go up throughout the rest of the year.
One of the factors behind this is BrightSpring’s home- and community-based services (HCBS).
“[In] home and community, we’re very focused on a number of procurement and operational initiatives as well, [and] we see about at least a point or 2% margin opportunity in those businesses over the next year or two,” Rousseau said Thursday during a discussion at the Leerink Partners Healthcare Crossroads Conference.
Based in Louisville, BrightSpring delivers care to patients in the home and in the community. The company focuses on complex populations, offering primary care, home- and community-based services, pharmacy services and rehab services to over 400,000 consumers throughout 50 states.
Rousseau also highlighted home-based primary care’s potential as a margin driver for BrightSpring.
“If we’re able to, ultimately, scale home based primary care — that’s a higher margin business too,” he said.
Overall, BrightSpring’s provider business has been a double-digit growth segment for the company. Rousseau called this characteristic of the broad based growth BrightSpring is seeing across the company.
“Home health and hospice grew near 10% in Q1, rehab grew well into the double-digits,” he said. “Community living and personal care — those are more Medicaid businesses, which have just been very steady for us, really good cash flow businesses. [It’s a] very nice mix of businesses, serving people in the home, on the provider side.”
Going forward, Rousseau identified home health, hospice and rehab as the main areas where BrightSpring expects to see the most outsized growth.
“We’re very optimistic that those businesses will continue to grow into the double digits for the long-term,” he said.
During the discussion, Rousseau also explained what he saw as the synergies between BrightSpring’s provider business and its pharmacy business.
“Most of our provider patients all get their pharmacy from our organization, so that’s a very meaningful synergy right there,” he said.
In 2023, a study published in the Journal of American Medical Directors Association found a 73% reduction in hospitalization for individuals who were receiving both home health care, and medication management from BrightSpring.
“I think that just shows the benefit of when people can address both their home health needs and their pharmacy needs,” Rousseau said. “Medication issues are one of the top two reasons why people go to the hospital … so addressing the pharmacy side of a patient who is high-risk is one of the No. 1 ways you can keep them out of the hospital and drive savings.”
Ultimately, BrightSpring sees the ability to drive home health referrals from its pharmacy customer base as a big future opportunity. Home-based primary care will also play a role in this as well, according to Rousseau.
“We’re putting care management resources to that and really the build out of our third pillar of home-based primary care was focused on driving more coordinated care, and driving more of these integrated care cross referrals,” he said.
Companies featured in this article:
