Alex Melugin, president at Springfield, Missouri-based Phoenix Home Care & Hospice, has been named a 2024 Future Leader by Home Health Care News.

To become a Future Leader, an individual is nominated by their peers. The candidate must be a high-performing employee who is 40 years old or younger, a passionate worker who knows how to put vision into action, and an advocate for seniors, and the committed professionals who ensure their wellbeing.

Melugin sat down with Home Health Care News to discuss his career trajectory and how the home health industry will change in the near-term future.

What drew you to this industry?

The desire to help people while using my business degree and background.

What’s your biggest lesson learned since starting work in this industry?

It’s all about people. Our product is our people, so my job is to create a culture where we can recruit, retain, and inspire the best caregivers, clinicians and leaders within our industry.

If you could change one thing with an eye toward the future of home health care, what would it be?

The over-regulation of our industry.

What do you foresee as being different about the home health care industry looking ahead to 2025?

In the past, many companies only focused on skilled or non-skilled workers. I believe more companies will continue to diversify their service lines and look at offering the full continuum of care. New Day Healthcare and Phoenix Home Care & Hospice have mastered the longitudinal care model by deploying technology throughout our company.

In a word, how would you describe the future of home health care?

Complex.

If you could give advice to yourself looking back to your first day in the industry, what would it be and why?

Outwork everyone!

To learn more about the Future Leaders program, visit https://futureleaders.agingmedia.com/.

The post Future Leader: Alex Melugin, President, New Day Healthcare And Phoenix Home Care & Hospice appeared first on Home Health Care News.

“Bringing Jeff on board is a huge lift for New Day as we continue to ‘Burn the Ships’

and change the way home health care is delivered,” New Day CEO G. Scott

Herman said in a press statement. “Jeff has an extensive history with our team and is an outstanding leader driven by operational excellence. Jeff is one of the industry’s most thoughtful professionals and his ability to problem solve is unmatched. He is perfect for this endeavor and I am thrilled the organization has evolved to a level we are able to capture his expertise.”

Founded in 2020, New Day has close to 30 locations across Texas, Missouri, Kansas and Illinois. The company offers a variety of home-based care services. New Day serves nearly 120,000 patients annually.

Most recently, Bonham served as senior vice president of home health at Empath Health.

“I am excited to be leading this innovative initiative with this market leading company,”

Bonham said in the statement. “Innovation is a staple of this leadership team, with whom I have a long history and have experienced many market leading successes.”

Welcome Health names new chief growth officer

Welcome Health — SCAN Group’s in-home senior primary care arm — has appointed Jay Bakshi as its new chief growth officer.

“We are excited to have Jay in this role as he brings extensive experience in partnering with payers in value-based arrangements to bring innovative solutions to the members they serve,” Welcome Health CEO Emily Cook said in a press statement. “Welcome Health has established a growing presence in Southern California, and we look forward to bringing our unique, high-touch primary care model to additional health plans and seniors across the nation.”

SCAN Group, a nonprofit organization focused on helping older adults age in place, launched Welcome Health in 2021.

As chief growth officer, Bakshi will be in charge of growth, market expansion, payer business development and contracting, account management and patient acquisition and retention.

“Welcome Health’s physicians and interdisciplinary teams holistically and expertly serve seniors where and when they need it, creating new access and improved quality of care,” Bakshi said in a statement. “I proudly make the Welcome Health mission my own — to eliminate the health obstacles preventing seniors from achieving what matters most.”

Previously, Bakshi served as finance lead for the state-sponsored businesses at Healthfirst, one of New York’s largest health insurance plans.

BoldAge PACE promotes Dr. Glenn Meyers to CMO

BoldAge PACE, a provider of Program of All-Inclusive Care for the Elderly, has promoted Dr. Glenn Meyers to the position of chief medical officer.

“Dr. Meyers has been an invaluable member of BoldAge’s team,” BoldAge Pace CEO Mary Austin said in a press statement. “His experience and compassion have allowed us to help older adults live a meaningful independent life at home, with grace and dignity.”

Prior to the promotion, Meyers served as senior medical director at BoldAge PACE. One of his chief accomplishments has been standardizing the organization’s clinical operation.

As CMO, he will be in charge of implementing his model across BoldAge PACE’s sites in California, Florida, Illinois, Indiana, Kentucky, Ohio and South Carolina.

“I am honored to join a leadership team that puts people first,” Meyers said in the statement. “BoldAge PACE is a values-driven organization that exceeds expectations by providing more to our participants than I ever saw during my time in Medicare Advantage. Our participants rely on us to meet their needs, and we proudly fulfill that promise every day.”

Home Care Alliance of Massachusetts Board of Directors appoints new chair

Renee McInnes has been appointed to chair of the Home Care Alliance of Massachusetts Board of Directors. McInnes currently serves as CEO of NVNA and Hospice.

The Home Care Alliance of Massachusetts is a nonprofit trade association comprised of home care agencies.

Prior to her appointment, McInnes served on the board as vice president. She will lead the board’s vision and strategic policy.

“It is an incredible honor to take on the role of Chair of the Board of Directors,” McInnes said in a press release. “What the Home Care Alliance of Massachusetts does each day to promote access to care is extraordinary. I look forward to working together with the executive team as we advocate for patients and families in our state amidst the current health care challenges.”

Axxess names new chief operating officer

Axxess has named Tom Codd its chief operating officer.

In his new role, Codd will take the helm of the company’s global operations and will be responsible for driving continued growth.

“Tom joined Axxess two years ago as our first chief people officer and has done exceptional work growing our talent and ensuring we maintain our award-winning culture as we expand,” John Olajide, founder and CEO of Axxess, said in a press release. “His extensive leadership experience and years managing global activities has been invaluable to our growth. As he transitions into his new role, we are excited about the continued positive impact he will have on our ambitious plans.”

Axxess is a home-based care technology company that provides agencies with cloud-based software solutions. The Dallas-based company works with over 9,000 organizations that serve more than 5 million patients around the world.

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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.

As growing providers, each company has picked up what they believe to be the right assets, at the right time, over the last couple of years.

Now, their leaders are expecting seller expectations to finally normalize on a greater scale in 2024, paving the way for accelerated growth.

While New Day Healthcare has been quite acquisitive since it launched in 2020, VitalCaring – led by April Anthony – has been laying down the groundwork of its venture before really zeroing in on major acquisition targets.

“It took a lot just to come together, to rebrand, to get everyone on one system,” VitalCaring President Luke James said last month at Home Health Care News’ Capital + Strategy event. “All of that was really what I’ll call the foundation laying. And it’s really hard to feel confident about doing a lot of deals, or a big deal, when you’re laying on top of a foundation you don’t feel is really settled yet.”

Backed by Anthony herself, The Vistria Group and Nautic Partners, the Dallas-based VitalCaring is a home health and hospice provider with around 60 locations across Texas, Oklahoma, Louisiana, Mississippi, Alabama and Florida.

With its foundation built, James and VitalCaring have the confidence to begin layering on top of it in 2024 and beyond.

Similarly, New Day Healthcare has been establishing a footprint as an emerging, up-and-coming home health, home care and hospice provider since its founding in early 2020. While it has already completed at least nine acquisitions, the company also now has a basic foundation it feels confident building upon in a more major way.

In essence, it – like VitalCaring – is primed for some more big-game hunting in 2024.

“We have a good base to build off of now, you want to make sure that base is stable,” New Day Healthcare CEO G. Scott Herman also said at Capital + Strategy. “You’ve got to have your business intelligence in place for your ability to scale and grow, in an industrialized process. We’ve got that now. So we feel like we can be more aggressive in both scale and numbers of acquisitions now over the next year or two years.”

Also based in Texas and backed by Kaltroco, New Day has about 30 locations across Texas, Missouri, Kansas and Illinois. It serves nearly 110,000 patients annually and has about 7,000 team members.

Its service line base is personal care, which Herman feels is a good bedrock for a home-based care continuum. He also thinks five or six more deals in 2024 is a reasonable expectation for the company.

Getting to that ‘sweet spot’

Over the last few years, home health lifers have made note of the fact that there are less founder-run businesses in the mid- to large-sized market range.

VitalCaring, for one, is trying to fill that void.

“If you think about five years ago, you had all these founder-owned, founder-ran businesses,” Anthony, VitalCaring’s CEO, told HHCN last year. “The people who were around the table leading home health businesses were lifers. They were people who were passionate about home health care. Now, that’s not necessarily [the case]. There’s this void in the market that I’m super excited about stepping into. We have the opportunity to bring the heart back to home health care.”

With that in mind, both New Day and VitalCaring leaders see an opportunity to grow into a “sweet spot” – a place where there’s considerable scale behind them, but not necessarily a nationwide, public market-type footprint.

“We’re not looking to build a billion-dollar company, we’re looking to build something in that sweet spot for home care,” Herman said. “$300 million to $500 million in revenue, that’s perfect. You can still touch the company, you still reach things. A billion dollar company? What the heck are you going to do with that? It’s a mess.”

VitalCaring may have aspirations above that $500 million revenue mark, but plans to stay within a specific geography – at least for now.

A lot of states may make sense to enter into at some point for the company, but its near-term strategy is to grow contiguously from the Southeast states it is in right now.

For New Day, Herman said the first must-have when looking at a seller is culture alignment. The company is looking for solid leadership, stability and consistency, and is not interested in fixer-uppers.

James went deeper on that front, saying that part of the focus around VitalCaring’s growth right now is talent acquisition.

“We’re not at a point yet where we feel like we have all the talent we need,” James said. “When we’re looking at deals that have real go-getters within, talented people that have a seat at the table within the organization – that adds a lot of value.”

What a seller needs to look like

Culture, scale and geography are starting points for attractive assets, in James’ and Herman’s eyes.

Beneath that, there’s plenty more layers.

For VitalCaring, its leaders are uninterested in assets reliant on one specific thing – whatever it may be – to be successful.

“They have to be well rounded,” James said. “We’re going to say no pretty quickly if there’s a high level of referral source concentration, or if 80% of their admissions are coming in from one or two sales reps that are either going to hold you hostage because they can, or where you’ve got turnover risk if they leave. Then you’re losing a lot of the value that you just paid a lot of money for. … We want strong organic growth and a good payer mix.”

On New Day’s end, it’s also taking a closer look at compliance.

“If we don’t have a clear line of sight to resolution of compliance issues, we don’t do it,” Herman said. “Then we’ll jump into financial performance, which is where we assess the diversity of the business. The more diverse the business, and the more stable the payers that are feeding that business, the more we like it.”

Outside investors may see home-based care as an opportunity for long-term growth, but perhaps just not now. Even inside operators may see the present market as a poor time to grow.

Herman and James see things differently, with multiples coming down from 2020 and 2021 highs.

“If you have a long-term vision, and your sponsors aren’t looking to exit tomorrow, then you’ve got the patience to be able to buy when it’s tough and be really well positioned when they’re looking to exit,” James said.

The post How VitalCaring, New Day Healthcare Plan To Reach The ‘Sweet Spot’ Of Scale appeared first on Home Health Care News.

Amedisys Inc. (Nasdaq: AMED) veteran Paul Kusserow is serving as Careforth’s chairman of the board.

Boston-based Careforth is a family caregiver support platform. The company recently announced that it was able to lower adverse health event occurrences and keep seniors out of costlier settings.

Currently, Kusserow also serves as Amedisys’ chairman of the board. He is also the chairman of the board of directors and co-founder of Healthpilot Technologies.

Aveanna Healthcare appoints chief legal officer and secretary

Aveanna Healthcare Holdings (Nasdaq: AVAH) has named Jerry Perchik its chief legal officer and secretary.

“I am pleased to announce the appointment of Jerry to the Chief Legal Officer and Secretary role,” Aveanna CEO Jeff Shaner said in a press statement. “Jerry has a strong background in corporate law and a wealth of healthcare industry and regulatory experience. I have known Jerry for more than a decade and have great trust in his leadership and counsel. It is a pleasure to welcome Jerry to our Aveanna family, and I look forward to partnering with him as we continue to grow and execute our strategic plans.”

Based in Atlanta, Aveanna provides home health, hospice and pediatric care services across 33 states.

Perchik has over 15 years of corporate law experience – in the health care industry – under his belt. Most recently, he served as chief legal officer for MedQuest Associates.

“The Board of Directors is delighted with the appointment of Jerry Perchik to lead our legal affairs team,” Rod Windley, Aveanna’s chairman of the board, said in the statement. “Having worked with Jerry in the past, I have great confidence in his legal expertise, regulatory knowledge, and corporate leadership. We believe Jerry will be a terrific addition to the executive team at Aveanna as we continue our mission to revolutionize the way home care is delivered, one patient at a time.”

New director of home care services joins Androscoggin Home Health Care & Hospice

Androscoggin Home Health Care & Hospice has appointed Mathew Collins as its director of home care services.

The Maine-based Androscoggin is a nonprofit operator that employs 500 workers across all 16 counties in the state.

Before taking time away to complete an MBA and additional certifications, Collins was administrative director of the palliative care service line at Northern Light Health.

New Day Healthcare promotes from within

New Day Healthcare has promoted Debbie Weber to the role of senior executive vice president of hospice operations.

“This elevation of Debbie, who is a tried-and-true executive, positions us to expand our

footprint at an accelerated pace,” New Day CEO G. Scott Herman said in a press release. “Debbie has a track record of growing significant multi-site, multi-state markets, on scale. She will oversee a hospice average daily census in the high hundreds, across four states and that size organization falls into the upper tier of mid-size providers and has us positioned for expansion.”

New Day now has close to 30 locations across Texas, Missouri, Kansas and Illinois. The company offers a variety of home-based care services. New Day serves nearly 110,000 patients annually.

Prior to her promotion, Weber led operations at the New Day company Phoenix Hospice.

Tomorrow Health builds its executive growth leadership team

Tomorrow Health has added three new leaders to its executive team.

Tomorrow Health is a New-York-based startup that enables home-based care through technology and other means. It does so via a network of providers, health systems and health plans.

The company has hired Gabriela Perez as chief growth officer; Craig Thompson as general manager and senior vice president of sales; and Peter Saul as director of provider growth.

“The expansion of our growth team comes as we aim to capitalize on significant demand from enterprise partners to enable high-quality home-based care,” Vijay Kedar, founder and CEO of Tomorrow Health, said in a press statement. “Having Gabriela at the helm of a dynamic, relentless team – alongside Craig and Peter — will allow us to accelerate partnership with health plans, providers, and suppliers to deliver high-quality care to the patients who need it most.”

Perez previously served as chief commercial officer at Big Health. Most recently, Thompson was an advisor at Getlabs, and Saul was national accounts director at Butterfly Network Inc.

The post Former Amedisys CEO Named Chairman Of Careforth Board; Aveanna Announces New Chief Legal Officer And Secretary appeared first on Home Health Care News.

Grand opening, grand closing.

Hospice providers began to work with Medicare Advantage (MA) via the Value-Based Insurance Design (VBID) demonstration in 2021. At the end of 2024, the “hospice carve-in” model will cease.

This will have an impact on home health providers who offer hospice services, obviously. But the failure of hospice’s fit within VBID points to larger problems that exist somewhere between home-based care providers and MA plans.

Since the Centers for Medicare & Medicaid Services (CMS) announced the end of hospice carve-in on Monday, hospice providers – many of which also provide home health care – have mostly applauded the move.

I reached out to multiple leaders throughout the week to get their takes, and one told me he was happy to see a “dysfunctional system go away.”

VBID was designed to help modernize the MA program. Along the way, hospice care and other tangential services were supposed to become a larger part of the program.

But plan and provider interest dwindled over time. Plus, providers weren’t exactly in the position to thrust themselves into a new payment system with more administrative legwork at the end of 2020 and in the beginning of 2021. There was something else going on during that period, too, I recall.

Thus, for now, home health providers will continue with the arduous task of working harmoniously with MA plans. Hospice providers, for now, are spared from that.

In this week’s exclusive, members-only HHCN+ Update, I dive into what CMS’ ditching of the hospice carve-in means for home health and hospice providers generally. I’ll also get into what it may mean for that space between home-based care providers and MA plans moving forward.

What providers think

Our sister site, Hospice News, has covered this story extensively throughout the week and gathered comments from many provider leaders and advocates. You can read most of those comments here.

I’ll highlight a couple here, too.

“This is a huge victory for patients’ access to quality care and for hospice providers who have continually identified challenges with this demonstration including concerns about VBID giving [Medicare Advantage Organizations (MAOs)] the ability to limit patient choices,” Ben Marcantonio, COO and interim CEO of the National Hospice and Palliative Care Organization, said in a statement.

Generally, providers and advocates believed doing away with the hospice carve-in was the right move. But many also wondered what may come next, recognizing the need for future innovation.

“Innovation remains vitally important,” Blue Ridge Hospice CEO Jason Parsons told Hospice News. “I believe what we’ve learned from the demonstration can spur innovation in other ways such as changes in concurrent care, palliative care payments, innovations around quality and access, and spurring organizations to elongate their continuum, as Blue Ridge has done with our PACE program, for example.”

Ultimately, the hospice carve-in was not laid out with enough thought behind it. Furthermore, it did not give providers enough time to consider how to best engage with it, particularly at a time when COVID-19 was peaking.

Many providers did adjust operations, though. Providers with the means tried to gain more scale to better account for a landscape with the hospice carve-in.

“The Medicare carve-in is something that hospices have been thinking about, planning for and talking about for years,” Nate Lamkin, president of the Fort Collins, Colorado-based Pathways Hospice, told Hospice News in 2021. “There was a rush not just in hospice and home health, but really in all sectors of health care to scale up. Our collective scale puts us on the radar of payers in a way that smaller, individual nonprofits wouldn’t be.”

It was also affecting the M&A market in other ways, VitalCaring President Luke James told me Thursday.

“It was impacting several deals we were looking at, especially smaller deals, in the $8 million to $15 million range, if the sellers were in a market with more exposure to it,” James told me. “Because the feedback we were getting from sellers was, ‘This payer is awful to work with in this market,’ or collectability is an issue, that DSOs are lengthened. … It was muddying the waters a little bit there, because we’re having to forecast what that looks like and the growth payers will have in given markets.”

That means it was affecting the leverage sellers had in certain markets, too, where VBID and the hospice carve-in may have been more prevalent, but also more of a problem.

New Day Healthcare CEO G. Scott Herman also told me the VBID system for hospice was a little bit “complex” and also “incomplete.”

The space between

In theory, the Medicare Advantage program is supposed to mirror the traditional Medicare program.

That theory doesn’t always work in practice. Home health providers will be the first ones to tell you so.

But the hospice carve-in also mirrors the supplemental benefit ups and downs that home care providers have seen with MA.

In 2024,13 Medicare Advantage Organizations (MAOs) were participating in the hospice carve-in, providing coverage through 78 health plans in 19 states, according to Hospice News. That was down from 2023, when 15 MAOs participated with 119 health plans in 23 states.

Similarly, supplemental benefit offerings in general increased steadily at first, but then began a downturn.

From 2020 to 2023, there was a 364% increase in plans offering the in-home support services (IHSS) benefit, which can be administered through the primarily health-related pathway and the Special Supplemental Benefits for the Chronically Ill (SSBCI) pathway.

In 2024, however, only 847 plans are offering IHSS as a supplemental benefit, a decrease from the 1,308 plans offering the benefit in 2023.

With VBID, MA plans struggled to create meaningful networks of providers to deliver hospice services. Providers, on the other end, were frustrated by increased administrative burden and payment issues.

Likewise, MA plans have found difficulty satisfying home care needs for their members, finding the home care industry too fragmented. Organizations like The Helper Bees have created solid networks on behalf of plans, but plans haven’t been able to do that themselves.

Some home care organizations never sought after the MA dollar, predicting trouble. Others are still invested, but their patience is wearing thin.

In the end, MA plans desperately need a wide range of home-based care providers to deliver care to their members. Adequate home health, hospice and personal care will undoubtedly keep their post-acute care costs down.

But for now, some things just don’t work in MA. That’s a bummer for forward-thinking providers who have adjusted to provide care for MA beneficiaries, but also an issue that plans need to solve.

Until they do, the bridge between MA plans and home-based care providers will remain under construction.

The post CMS To End Hospice MA Carve-In: Insights For Home-Based Care Providers appeared first on Home Health Care News.

Over the next 12-18 months, the mergers and acquisitions that do or do not take place in home-based care will tell a story worth listening to about the future of the space.

The context has become monotonous to tell at this point: high interest rates are affecting dealmaking across the country; Medicare Advantage (MA) penetration is causing payment issues for most providers; home health agencies, specifically, are navigating fee-for-service rate cuts; and valuation expectations have been too high after a whitehot 2020 and 2021.

There’s a general expectation that interest rates will come down at some point this year. Potential buyers have also signaled that seller expectations around pricing have started to come down, helping both parties start negotiations with more reasonable expectations.

The rest of the aforementioned context points remain the same. MA penetration is likely to continue, and there is no sign the Centers for Medicare & Medicaid Services (CMS) will back off home health rate cuts in traditional Medicare.

Of course, home-based care M&A could tick up in 2024, and one sector could still have a down year. For instance, Medicaid home- and community-based services deals had a strong fourth quarter, but traditional home care and home health care did not.

But what may be more interesting is how the market responds in each section of each sector. There’s the large providers, those in the middle and the mom-and-pops.

In this week’s exclusive, members-only HHCN+ Update, I take a stab at projecting how M&A will play out over the next 12-18 months in each part of the market.

The largest players

In Home Health Care News’ trends piece at the beginning of 2023, we predicted that “there was a good chance that 2023 [passed] without another monster, jaw-dropping mega deal anywhere close to UnitedHealth Group’s LHC Group buy.”

We got egg on our face almost immediately, as UnitedHealth Group agreed to purchase Amedisys Inc. (Nasdaq: AMED) a few months later.

We’re most likely in the third year in a row where a mega-home health deal will be agreed to, at the very least. Enhabit Inc. (NYSE: EHAB) has a fourth-quarter earnings call in early March – which is later than usual – and I expect their strategic review to be completed by that time.

I also expect that to wind up in a sale, but Enhabit is being affected by just about everything that’s currently affecting the home health market, whether macro or micro.

For one, many buyers that may have jumped at the opportunity to buy Enhabit just a few years ago could be out of the game, for one reason or another. They may have already purchased another entity, or have decided to stay out of home health care entirely until the MA and fee-for-service rate questions get cleared up.

In my estimation, though, Enhabit would have a large, willing buyer right in front of it right now if it wasn’t for the current M&A environment. On Monday, I wrote briefly about the impact that the Biden administration’s attitude toward health care dealmaking is having on the market.

Currently, regulators and lawmakers are taking a hard stance against major consolidation and private equity involvement in dealmaking.

If that weren’t the case – and it obviously may not be the case following this fall’s election – I believe UnitedHealth Group (NYSE: UNH) would be happy to add Enhabit to its home health repertoire, which would then include Enhabit, LHC Group and Amedisys Inc. (Nasdaq: AMED), if the Amedisys deal went through.

UnitedHealth Group’s Optum would still own just about 15% – or less – of the home health market, not a huge number in other industries. But the juice may not be worth the squeeze for the company at this point, as they are under the spotlight for pending acquisitions in other sectors, too.

Where Enhabit goes is of note for the entire industry, as they are basically the only pure home health and hospice player left on the public market. They are also one of the only large home-based care companies likely to sell in the year ahead.

The others that could sell include companies nearing the end of their private equity sponsorship, like Elara Caring or Help at Home, for example.

Help at Home, specifically, could reap the benefits of a couple of better-than-average years in the HCBS space, which is its bread and butter. A report surfaced in December suggesting that the PE firms The Vistria Group and Centerbridge Partners were weighing a Help at Home sale.

My guess would be that a sale wouldn’t go final until CMS finalized its “80-20” rule, which is likely to come to fruition in the spring.

There may not be a flurry of big-time deals in the next 12-18 months at the top, but the ones that are finalized will say a lot about their respective sectors within home-based care.

Middle market

M&A experts have repeatedly told me that there has never been a dip in demand for quality home-based care agencies over the last two years, despite a lull in activity.

In the next 12-18 months, that lasting demand will likely finally come to the surface in the middle of the home-based care market.

Think providers that have multiple locations covering a significant footprint in one state or more.

Most leaders I have spoken with over the last month expect for M&A in this area to pick up sooner rather than later. Nautic Partners helped kick things off with the acquisition of Texas-based Angels of Care this week.

“The big question mark right now is what multiples are going to look like,” VitalCaring President Luke James recently told me. “I think we’re going to see a couple of deals that reset the market, especially for sizable transactions.”

New Day Healthcare CEO G. Scott Herman told me in January that his company is not only expecting home health M&A to open up this year, but also banking on that for growth.

I cautiously expect the largest companies to revamp their M&A strategies, and I expect growing, regional providers like New Day to continue on their growth paths in this area of the market. That’s without even mentioning more robust PE activity.

The only question will be around how many quality targets are left. Herman also mentioned straying away from “fixer-uppers” moving forward.

Others have echoed that sentiment over recent years, suggesting that fixer-uppers are not worth the time, resources and effort at this stage of the game.

“We don’t want to do another fixer-upper, period,” Traditions Health CEO David Klementz told me last year.

Mom-and-pops, smaller providers

There are likely going to be a lot of fixer-uppers in this category over the next 12-18 months, even if they weren’t before. MA penetration, and fee-for-service rate reductions, will likely be too much for smaller providers to handle.

While smaller businesses do have the flexibility to change course quicker than larger organizations at times, they also don’t have the financial capacity to handle multiple blows over a five-year period.

That’s, essentially, what’s occurring with MA penetration and a less stable fee-for-service leg to stand on.

Now, the quality ones could obviously outlast that, and some backing provided by a PE firm or strategic could pay off if the bottom falls out of the middle market. In other words, if not much is left in the middle of the market, I believe small, quality agencies will begin to be bought up in bunches.

The ones that aren’t so lucky will still provide opportunities for the larger providers in it for the long haul, but mostly through the absorption of staff.

The post Projecting The Most Impactful Home-Based Care M&A In Near-Term Future appeared first on Home Health Care News.

New Day Healthcare has been one of the most active acquirers in home health care over the last year. As it grows, it’s looking to set itself apart from the home health company archetype of yesteryear.

At the heart of New Day’s paradigm-shifting approach lies a commitment to remote home health models, a concept born out of necessity during the pandemic. Unlike traditional setups, New Day opts for a decentralized approach, ditching corporate offices allowing for more flexibility and adaptability in delivering care.

Amidst the promise of innovation, Herman remains aware of the challenges ahead.

From the seismic shift towards Medicare Advantage, to the perennial growth and workforce management hurdles, the road ahead is full of obstacles.

Herman sat down with Home Health Care News on the latest episode of HHCN+ Talks to chat about his company’s emergence and what lies ahead.

The transcript of that conversation is below.

HHCN: Scott, let’s start with background on yourself and New Day.

G. Scott Herman: I’m a nurse paramedic by trade. I’ve got 30-plus years of home care experience. I’ve been blessed to lead and form some of the largest companies in the country, including Harden Healthcare’s home health and hospice line, Jordan Health Services, and Elara Caring. I’ve worked in nearly every type of home care company including publicly-traded, not-for-profit, and private equity.

I’m currently the CEO and founder of New Day Healthcare. We’re a provider of home health, hospice, pediatrics, home-based community care and consumer-directed and personal care services. We currently serve about 11,000 patients on average daily census and we touch nearly 110,000 patients annually.

We’re operating in Texas, Kansas, Missouri and Illinois. We have 28 locations with nearly 7,000 team members. We’ve completed nine acquisitions since formation in July of 2020 and we have a robust growth and acquisition plan for 2024.

One of the interesting things that your company does is you have a remote home health model, especially in Texas. Can you take us behind the curtain there and explain what that means?

To take you behind the scenes, a bit of background is necessary. In late 2019, I sat with a few trusted colleagues and planted the seed to start a new home care company. We wanted to be capable of meeting the demands in the changing industry. We all had previous experience in mid- and large-scale organizations, and we understood the investment models and the effort needed to create a platform company.

The climate at that time was robust with acquisitions and the market was white-hot. Shortly after our concept was born, the pandemic hit and we all know the world dramatically shifted. Although we couldn’t predict exactly what would happen, we did know that things would not be the same; access to patients was limited, providers were locked out of facilities and labor became sparse and very expensive.

Our circumstance as a new startup looking to buy a platform became really interesting and we almost immediately had to pivot from our original plan. We knew we needed to build something that needed to be way different from anything we had previously done. We needed to rethink it all. We needed to rethink everything. We gathered around my breakfast table and wrote a very intentional purpose statement consisting of eight guiding principles. These principles allowed us to rethink it all and build something that could impact how home care is delivered.

Now, we weren’t working completely blind. We’ve been heading down a continuum integration for a decade but we were not able to close the loop, mostly due to investment models and demands. Understanding what we wanted to build, we etched out how we would build this and then what we needed to get there.

Interestingly, we agreed to hold the purpose statement and commit to it. Collectively, we agreed that if we could not build a home-based company capable of innovation we envisioned, we’d simply leave the industry. In other words, if we couldn’t do it our way, we were done.

That’s where our mantra, “Burn the ships,” was born, and this will tie into that remote model. In 1519, Cortés arrived in the New World with 600 men and famously burned his ships upon arrival. This act sent a clear message to his men that there was no turning back and no options. While we didn’t limit all of our options, we did take a very narrow path that defines success. The path has three simple elements.

Firstly, build a home-based care model aligned with payer networks and the growing managed care populations. Secondly, create a technology platform that enables our provider network to identify chronic disease indicators that create illness exacerbations while building out the care networks to intervene and improve outcomes — both clinical and financial outcomes for payers and providers. Finally, refine a comprehensive solution so that it can be injected into a national provider or payer to be meaningful in scale.

Our approach isn’t new; it’s people, process and technology. The technology is our Carelytics program — a proprietary combination of software, databases, algorithms and artificial intelligence that link in real time for intervention.

Let me briefly explain Carelytics at a high level because it’s important as we discuss this remote capability: We currently collect information from 14 different EMRs and data systems. The number of data systems we can collect information from is unlimited. We then run algorithms on the data to identify tendencies, and using pattern identification, we identify potential adverse reactions.

Our algorithms stimulate alerts that automatically notify providers and caregivers of potential issues. Internally, we deploy care teams. Externally, we alert providers and make referrals. These external referrals would only be in areas we don’t cover or don’t have full-service access.

Now, let’s consider that remote model because we started New Day during the pandemic’s challenges and we had to think differently. We began at the top of the formation with our corporate office and decided the organization should be run without a corporate facility.

Throughout my nearly 30-year career, I’ve prioritized keeping overhead low and investing in clinical care rather than expensive corporate offices and support. To this day, New Day has no corporate facility and all executives work effectively remotely. We adapted to the pandemic environment and never incurred corporate facility costs. This allowed us to develop innovative solutions to meet and communicate. It works for us due to our seasoned team and experience in multi-state organizations.

In 2Q of 2020, with the pandemic at its height of uncertainty, we really began to look at the tea leaves and where we thought this changing ecosystem might be headed. Finding a growing portion of home care census was shifting to managed care, we firmly believed this pandemic would push seniors to MA plans at an accelerated pace. We began looking to acquire a provider that had a remote model capable of delivering services effectively and on some scale. We located a provider serving the entire state of Texas from a single location.

As we worked through the operation and the model, we were convinced that a remote workforce plan could work and effectively serve the growing managed care populations in a non-episodic capacity. We were able to acquire this provider, Home Care Providers of Texas, and we began to develop and scale remote-operated home health businesses. Home Care Providers had been around for 20 years so we had a good workforce and a base to build on.

Because we were creating something new, we had the luxury of building it for purpose and we weren’t burdened with the ingrained legacy process of models that are facility-tied that tend to drive increased expenses, not very much brick and mortar, so we were not dragged down with those expenses and we had a business that was very accustomed to running remotely. We had to build and insert scalable processes, which began with EMRs, finance system, contracting expertise, especially important, recruiting, hiring and training.

At the peak of the pandemic, we were hiring at an astonishing rate and we were able to move quickly to staff cases. The growth of MA plans actually accelerated at a much faster pace than we really anticipated. We had to ration admissions, pull payers based on reimbursement while we renegotiated agreements. Today, our Texas home health operations operate functionally with approximately 72% non-Medicare episodic patient mix. We’re off to a good start, but we’ve got some work ahead of us in this remote model.

Something that I put in a recent HHCN+ update, Scott, was a quote from you, basically saying that home health providers were unprepared for — and still are unprepared for — the looming MA penetration. What do you mean by that? Why do you think there’s such a lack of preparation among the home health industry when it comes to Medicare Advantage?

What I mean by the fee-for-service model being obsolete really means that the traditional episodic models have evolved. Patient mixes of 85% and 90% are unsustainable levels for home health providers, on scale anyway, and unsustainable in the foreseeable future. At least that’s what we’re experiencing internally in our markets.

The rise of Medicare Advantage and per-visit reimbursements shifted dramatically in the pandemic, maybe it’s traumatically, but it’s also dramatic. Maybe the pandemic seems to have accelerated that. According to the Kaiser Foundation, 31 million people are enrolled in Medicare Advantage Plans, accounting for more than half of the eligible population, 51%. Those 31 million people represent $454 billion or 54% of total Medicare spending — and that’s net of premiums.

The average Medicare beneficiary has 43 Medicare Advantage Plans to choose from. It’s the largest they’ve ever had. That’s an insane number to me — and that’s grown. We see how MA plans market — their persistence is winning the day. The current baby boomers entering retirement were introduced to managed care and have participated in managed care for 20 years or more. These retirees were raised in managed care plans. The stigma of managed care is not the same for those new retirees. They’ve been in those plans for extended periods, and they don’t seem to be afraid of the option limitations.

MA plans have been sweeping the pots with medication supplements, transportation, vision, dental — even cash and food. MA marketing is large-scale. It’s effective in winning market share. When we talk about market differentiators, we’ve created that option from data. Kaiser Foundation said nearly one-third of Medicare beneficiaries live in a county where at least 60% of all beneficiaries are enrolled in MA plans. Those are metro-concentrated. Communities are converting to MA plans and I’m sure it’s focused marketing that’s making it work.

Not all markets are built the same, we customize our offerings by market. Most providers we look at and work with are longer-term legacy operations. They built their business over many years in highly competitive markets. The competition for finite clinical resources demanded that home care providers step up and pay benefits and to compete. They had to compete with health systems. Having heavy traditional Medicare mixes made that possible.

This conversion of patients to Medicare Advantage meant that you could no longer manage large caches of traditional Medicare patients because they just weren’t there. Because reimbursements were so much lower, the traditional models are suffering. There’s a fundamental shift in how these organizations have to operate. Smaller providers are against the reality that they do not have the resources to create innovation, and the rising cost of labor to include wages and benefits just compounds the payments issue.

As owners see margins slip, labor costs rise. They’re just struggling to keep up. In my opinion, it’s not that providers are not willingly slow to adapt, it’s the resource constraints that make that adaption pretty difficult. Investments in technology, refining processes and taking big care model leaps are just difficult transitions. We find many providers coming to the market don’t have the contract negotiations used to meaningfully move rates and terms, and they cannot supply the compelling data needed to manage these large-scale populations. It’s just an evolution of the space. I think the slowness of adoption is really about the ability and access to resources for these smaller providers.

Resources are certainly a big part of it, but in 2024 and beyond, what can home health providers do to catch up, in your estimation?

How we prepared is we bought a large-scale statewide provider in Texas to attack the problem and create a solution. Our remote operating strategy is effective. It’s improving every day. We’ve invested in technology and the development of our paralytic software and support programs to identify patients early and intervene.

This has proven to not only be a cost-effective avenue for cross-service line referrals, but it’s evolved into a community outreach and new community patient acquisition tool. Because we’re heavily involved in the communities in which we serve, our culture and our traditional brick-and-mortar businesses in the north — which are higher producing more successful businesses in Missouri and Kansas through our Phoenix Home Care and Hospice line — are very culture-ingrained. They have pop-up meetings in the community. They don’t do them in the bricks-and-mortar buildings and the locations that they have. They go to the community. They provide meals during Christmas that can be drive-thru meals or sit-down meals. They meet their staff at coffee shops and parking lots, and that ingrains them in the community.

Because they’re ingrained in the community, the community looks to us for senior care operations. We may not have all the solutions, but the contacts that we get when the community calls us for senior care options, the contacts that we get result in database input and access to resources for patients. It allows us to follow potential patients.

We process thousands of inbound calls every day and a rapidly growing number of social media contacts. As the contact occurs, we route plans, implement care resources for the patient in all our lines and all our offerings. If we don’t have the needed services, we refer it out, but we manage the patient in our Carelytics database.

When a need is identified, we enter data into Carelytics and we do that over a thousand times every single month. These entries are run through our software and our algorithms and they help define potential needs. We get automated responses when we have a trigger to our Carelytics teams and they assess, develop plans for patients, then they make referrals, internal and external, if appropriate.

Our Carelytics is about 35% deployed for our enterprise. We have 60,000 patients in our database. In 2023, we had 18,000 clinical patient interactions and about 2,500 cross-company admissions. Approximately 200 chronic disease patients are tracked on the hospice path each month and in all our programs, we admit over 5,000 patients annually through Carelytics and that’s 35% deployed.

To address preparations, the things I outlined took a very high level of investment and commitment to do things differently. You see, “Burn the ships” isn’t just a catchphrase, we’re living it with our investment partners at Kaltroco. Not many organizations are positioned to either invest or commit to rebuilding the new provider paradigm.

If they’re large enough, they have the resources, they’re often committed to traditional models, it causes a lot of redesign and that takes time. Our startup position gave us the latitude to build for purpose and we can manage, remote and integrate traditional programs on scale. Providers have to engage data and have to find ways to engage in Medicare Advantage plans.

You’ve had an impressive run here during a mostly quiet period for the home health industry. What has been your M&A strategy? Before we get to the future, what has been your M&A strategy over the last couple of years? How have you found targets? How have you ultimately decided that they were in the right markets, that they had the right people? Then, also, how do you integrate them once you actually have agreed on a price?

We’ve got a great investment group focused and committed to doing well by doing good. Kaltroco North America is led by Kenny Hammond, the Chief Investment Officer, along with our commercial lender and co-investment partner, First Citizens, formerly CIT. They’ve been crucial not only in supporting our investments, but as strategic partners.

Kaltroco delivered innovation development from day one. They supported it. We funded it, beginning with the investment and team members before we had an asset or a real line of sight on assets. Because we committed to not working with short-sighted partners and only accepting reasonable returns, we’ve been able to be very selective in building this enterprise. We’ve kept our leverage very low, and we’re in a very liquid position in time when the industry was struggling, so our discipline put us in a very strong investment position.

Our investment position discipline is something we outlined early. Three core elements. We do not take on train wrecks. In my career, I’ve been and have seen over-optimism around turning companies around. It’s always harder, it takes longer than ever envisioned and then, it gets in the way of innovation. More often than not, the juice just simply isn’t worth the squeeze for us. We want good culture and compliance companies. Good companies begin with culture. If the cultures do not align, we simply do not chase the deal. Chasing culture, changing culture is extremely difficult, time-consuming and egregiously expensive.

Cultures develop for specific business reasons and that culture exists for a purpose. Good companies, by our definition, align with culture. If we do not align with a culture, we just don’t chase it. It doesn’t mean it’s bad; it just means it’s not for us. Good companies, by definition, do not have unresolved compliance issues. Unresolved compliance issues are troublesome; they’re most often always more problematic and reach farther than diligence uncovers.

All companies are going to have some regulatory oversight and corrective actions. That’s part of the business, and we all understand that. And by unresolved I mean no clear path to resolution. If we don’t have it, we just walk away.

Third, we have to demonstrate our capability. Back-office contracting skill and culture will produce performance and grow market share for the economy.

As we assess companies, these are the critical elements that we have to have. These three elements are core for us. We looked at over 200 companies over the past three and a half years and we bought nine because we adhere to the strategy that we will not overpay for companies. We will not engage in what became very aggressive auctions in 2020 and 2021. We simply stepped in, took a look, and stepped back. We knew that if we over-levered ourselves, if we played that position, we wouldn’t be in the spot we’re in today to move forward.

Is your M&A strategy going to change at all in 2024 and beyond? I assume the core principles are still going to be there, but is anything going to be different about the M&A strategy moving forward?

Yes, we are. Because we’re in a very good position, our leverage is low, we’re performing well, we’ve got really good diversification across our assets while taking care of 11,000 patients in four states. We’re not really impacted by one negative movement in reimbursement markets or one regulatory problem. Our ability to understand that patients are what matter, not as much the payer. The patient is what we really examine, the payer is how we fund that. A lot of organizations tend to look at payers driving their formation rather than the patient driving it.

Our M&A strategy is twofold. We’re in a great position. We’re very liquid. We’ve got lots of access to capital. We will be opportunistic for transformative assets, larger assets. We’ve been deep on several large assets over the past two years, but since the purchase of our platform company, Phoenix Home Care and Hospice, we’ve not pulled the trigger on another transformative acquisition. We would do those, but they will be based and executed on the things we discussed. It’s not a lack of capital. I said we’ve got plenty of that.

Really, the elements of culture, pricing and impact on patient mix changes closely tied to asset readiness have caused us not to pull the trigger on those. We are very interested and still looking at those. We’re seeking transformative assets of a larger size, $50 million plus. The criterion is size as well as geography, but looking to grow in the South and Midwest.

Second, we’re continuing to fill out our footprint with complementary assets. Those are in personal care and hospice in Texas, skilled and hospice in our other regions and PDN in Missouri, Kansas and Illinois. We would love to close five to seven solid transactions this year. We are open to size and scale. We would love to close more and we would like to be as aggressive as the market allows us to be in those transactions.

Layering on the services you do have in every single market — is that one of the goals?

One of the goals is to fill out our service footprint where the supporting reimbursement structure makes sense. In some states that we operate, being in the personal care, the consumer-directed care business just doesn’t make sense. In other locations, it makes a ton of sense.

In our Missouri operation where we have a pediatric business, it makes all the sense in the world because Missouri really stepped up and supported it. But in our Texas business, it’s a lot tougher. Where we have tremendous skilled care competition in Texas, we’ve got the state covered with home health and hospice. We want to layer in personal care services there. Then where we want existing footprints where it makes sense, we’ll lay in those complimentary services.

Where do you want the company to be in five years, with all the big ambitions that you have now? Where are those going to take you when we get to 2029?

Today, we touch 110,000 patients annually in that agency of about 11,000. In five years, I would be disappointed if we were not at 25,000 plus on ADC with a fully integrated Carelytics program.

Having said that, there are a number of factors that drive that growth and target, including stability to financial markets, reimbursement, state budget considerations and then of course the expansion of managed care. We do know that Carelytics is very attractive to the industry and we will have to decide at some point to hold and continue to build or let the technology move into the hands of a strategic more capable of national deployment.

Throughout 2024 and 2025, we’re focused on growing this enterprise through acquisitions and organic growth. More distant than that, we’ll be driven by the demand and the evolution of the market. We update our strategy every year, keeping a two, three-year focus.

What do you think are going to be the biggest obstacles besides Medicare Advantage?

Well, I will tell you that staffing has eased up and our recruiting strategy, tied in with our cultures, puts us in a really good position on staffing. We have very low vacancies across our organization. One of the reasons we’re able to do that: we kept corporate overhead really low and we’re able to ensure that every single employee that works for New Day — all 7,000 — is eligible for full health benefits. That’s full-time, part-time, PRN, every person at every level. If you’re a part-time employee, you’re eligible on day one.

One of the big cost pushers for smaller organizations as we go out and do acquisitions is the cost of health care benefits. They’re just rising and I will tell you that the pandemic has pushed them to unpredictable levels. Health insurance costs are rising everywhere. One of the things we do on an acquisition is we immediately implement our benefits plan and we upgrade benefits for almost everyone that we encounter. In fact, today, every company we’ve bought, we’ve upped their benefits. That doesn’t come at an additional cost to us. We actually get scale reductions at a lower cost, but those companies are benefit-positive day one.

We know that the health care paradigm has shifted. We know that cost is of essence out there. Another big obstacle to getting to our size is market conditions and the availability of quality assets. That’s probably the biggest factor. Elections will have a big impact on financial markets and investor confidence will respond appropriately. The labor markets are beginning to loosen up. We have had good success recruiting. We’re internally recruiting — with very low vacancy rates — but we’re seeing owners settle in and level set on home care market conditions that include reimbursement changes and regulatory oversight.

’21 and ’22 created very high valuation expectations. That frenzy’s a bit in the rear-view mirror. Sellers are beginning to settle on realistic value propositions. We see them either settling in and continuing to operate, letting the dust settle, or they’ve reconciled that it’s time for the value adjustments and are here to sell the company. The latter is being seen more frequently as the cost of capital rises and inflates. The quality assets coming to market might be our biggest issue in 2024. We’ve got a pretty good handle on the labor issue, at least in our enterprise, because of culture and the ability to spread benefits.

Do you have a prediction for home health care in the next year?

I think it’s all going to tie into what we’ve talked about, but the prediction is really pretty obvious. Home health M&A will open up in 2024. We’re setting expectations around pricing and whether the final deals get done or not. The free money days that drove prices up, it’s just not available at the moment.

As previously referenced, ongoing confidence and sustained revenue-earning streams will make quality assets a challenge. However, good companies will draw attention and secure solid pricing. I actually have a second prediction and it’s around Medicare Advantage and it’s probably obvious. M&A will continue to grow and home care models will evolve as they always have because home care operators are very resourceful.

The question for all of us might be, where are we on the evolution adoption curve? Answering that question might be the biggest conundrum for home care. That prediction would be, “Are you preparing? Are you advancing on this M&A front?” If you are, there’s some survivability opportunity there and the ability to thrive. If you’re not, you might want to be thinking a little more about the previous, maybe reconciling on values, and maybe selling the business.

Now, those are the predictions. Data is going to drive the world. M&A is going to require more data. They’re going to get deeper into it. For us, in our particular strategy, size isn’t as important as quality in the product we deliver. We create our Carelytics program. We show cross referrals. We show community involvement, the ability to drive new revenues. We take that information and inject it into a strategy, then, that’s how you can change the face of home care. Does that happen in 2024? Big steps in ’24, but ’25 and beyond is what we’re really looking at.

The post How New Day Healthcare Plans To Be The Face Of A Changing Home Health Landscape appeared first on Home Health Care News.

It’s an aspect of the job that many of them enjoy, but home health providers have always tried to make them feel like they were connected to the broader culture of the organization.

That’s generally what brick-and-mortar offices were used for. Despite the front-line workers operating remotely, training and other company-wide activities took place at those locations, where the back-office employees had an in-person work environment of their own. 

In 2024, however, there are examples of home health providers doing away with brick-and-mortar locations to keep overhead costs down. Keeping those costs down, the thought process goes, allows providers to: better adapt to Medicare Advantage (MA) penetration; mitigate the effects of fee-for-service rate cuts; and offer better pay and benefits.

New Day Healthcare – one of the fastest-growing providers in the country – has employed this strategy in Texas, its largest market.

To be clear, the actual home health delivery is not remote in the New Day’s Texas model, but the back-office functions are. In fact, all New Day executives work remotely.

“It gives us a very efficient model on the recruiting piece,” New Day CEO G. Scott Herman told Home Health Care News. “Nurses expect more remote flexibility, it’s kind of become a mainstay. We actually have nurses that come to us because they don’t have to be anchored to a physical facility. They can manage those things remotely, have Zoom meetings, connect with their supervisors at need and manage everything on the internet. It’s working well for us.”

Part of the reason that the remote strategy was employed in the first place is because New Day launched during the pandemic. What started out of necessity continued for strategic purposes.

New Day now has close to 30 locations across Texas, Missouri, Kansas and Illinois. It has completed nine acquisitions since 2020 and serves over 100,000 patients annually.

The remote concept is part of New Day’s “burn the ships” mantra, which is based on the belief that home-based care delivery needs to be reinvented.

“We’re having good luck hiring our teams,” Herman said. “By keeping very low overhead at New Day, we are able to then push benefits into the field. All of our part-time employees are benefits-eligible. And that’s because we don’t have a corporate office.”

The brick-and-mortar case

On the other end, in October, Elara Caring – one of the largest home health providers in the country – moved one of its regional headquarter offices to a more advantageous place for business.

Located in Jackson, Michigan, the office will help Elara Caring further embed itself into the Jackson community and the surrounding areas, according to COO Ananth Mohan.

“We’ve actually had a presence in Jackson for a long time,” Mohan told HHCN. “We see over 3,000 patients daily in Michigan, and we’ve got all of our service lines – home health, hospice, behavioral health, palliative care, personal care services – there. Jackson has been a hub. We saw revitalization happening in that downtown area, and a transformation. And we wanted to do our part. So we moved our office, which was a little farther away from downtown, into that downtown area, just to have more of a presence.”

Based in Dallas, Elara Caring has a footprint in 17 states in the Northeast, Midwest and Southwest. It serves more than 60,000 patients and their families across 200 locations.

The company obviously is a bit different than New Day. It’s been around longer – way before the pandemic – and has more scale.

For now, Mohan and Elara Caring’s other leaders still see the value in having brick-and-mortar locations across the country for their back-office and frontline staff.

“In general, being present for our communities, being local, is important,” Mohan said. “It helps us build better relationships with not just patients, but referral partners, health systems and the community.”

The leadership team at Elara Caring values staff having a direct line to leadership, whether in person in a nearby hub or otherwise.

“We’re pretty committed to local presence, that’s important,” Mohan said. “Health care is local. That’s not going away.”

Maintaining culture, flexibility

Neither strategy is definitively right or wrong, particularly because Elara Caring and New Day – as they’re currently structured – are very different companies.

Plus, New Day is still focused on maintaining a solid culture and in-person meet-up opportunities. Elara Caring, on the other hand, is also committed to allowing more flexibility for their employees.

“We do have pop-up events, which are live events where we invite the staff to come in and grab a cup of coffee, for instance,” Herman said. “We had one at a local donut shop in East Texas where people swung by to meet with our folks, making sure we have that kind of unity that you need. We do those on a regular basis, at least once monthly, in all of our regions. And that keeps them connected.”

Similarly, while maintaining those brick-and-mortars, Elara Caring provides pathways to further flexibility for its staff.

“People value flexibility, right?” Mohan said. “Any step you can make digitally helps the employee experience, and helps give them flexibility in their day to day. Because, at the end of the day, you want to maximize patient time. And you want to maximize clinical time. So that flexibility is always appreciated on our end.”

The post Are Brick-And-Mortar Home Health Locations Worth It? It Depends On Which Provider You Ask. appeared first on Home Health Care News.

Elevance Health to acquire infusion provider Paragon Healthcare

Elevance Health (NYSE: ELV) announced that it has plans to acquire the infusions services company Paragon Healthcare.

The acquisition opens up the opportunity for Elevance members to receive more in-home care.

“The acquisition of Paragon Healthcare will deepen our capabilities around providing affordable, convenient access to specialty medications and best-in-class services for our members living with chronic and complex illnesses,” Elevance EVP Pete Haytaian said in a statement. “Together, Elevance Health and Paragon Healthcare will have the ability to provide members with greater choice on the most appropriate site of care options — such as ambulatory or in-home locations — which will remove barriers to care and better support members’ whole health.”

Based in Indianapolis, Elevance Health is a large managed care company. It also is part provider, however, and has made in-home care a priority.

Based in Plano, Texas, Paragon Healthcare is an infusion services provider that caters to patients with chronic and acute conditions through ambulatory infusion centers and home infusion pharmacies.

Elevance plans to expand Paragon Healthcare’s reach and operations and hopes to enhance therapeutic coverage beyond the eight states Paragon operates in now.

Post-acquisition, Paragon Healthcare will become part of CarelonRx, Elevance Health’s pharmacy services segment within Carelon, its health services division.

The deal is expected to close in the first half of 2024.

New Day Healthcare buys Texas-based Compassion Hospice

New Day Healthcare, a home health and hospice provider, has acquired Compassion Hospice, a Texas-based hospice provider.

The specific value of the deal was not disclosed.

New Day now has 29 locations across Texas, Missouri, Kansas and Illinois. The company serves over 100,000 patients annually and has been growing rapidly over the past few years – this is the company’s ninth completed acquisition since 2020.

“New Day Healthcare is pleased to welcome Compassion Hospice to our platform,” New Day Chief Development Officer Matthew Griffin said in a statement. “Compassion provides us with a high-quality hospice operation in East Texas, where New Day currently has significant market share in both personal care and skilled care services. This latest acquisition continues to prove New Day’s commitment to bringing together multiple home health service lines within markets to improve patient care coordination and outcomes.”

Last fall, New Day acquired Pathfinder Home Health and AdvantageCare Home Health in September. Both of those companies are headquartered in Texas.

Despite the acquisition, Compassion Hospice will maintain its current brand and leadership structure.

Assisted Living Services buys Day Kimball Homemakers

Assisted Living Services Inc. — a non-medical home care agency — has acquired Day Kimball Health’s Day Kimball Homemakers Inc. The terms of the transaction were not disclosed.

As part of the deal, Day Kimball Homemakers employees have been offered positions with Assisted Living Services.

“It’s our mission to build upon and grow the strong tradition that Day Kimball Homemakers has established among the senior population in the area, while bringing some enhanced services to the community such as live-in companion, adult family living, foster care, and technology solutions for aging-in-place,” Mario D’Aquila, chief operating officer at Assisted Living Services, said in a press statement. “Further, we are excited to provide the community with additional jobs and work opportunities.”

Assisted Living Services provides care for seniors in a number of settings, including their homes, retirement communities and senior living communities.

Loma Linda University Health launches PACE program

Loma Linda University Health has launched a Program of All-inclusive Care for the Elderly model — better known as PACE — at its Park Avenue location in Redlands, California.

“This is concierge planned care with a plan,” Leslie Von Esch, director of Loma’s PACE program, said in a statement. “PACE creates a community for our local seniors and keeps them active — all in addition to providing services and support for their regular medical needs.”

PACE programs help dual-eligible beneficiaries remain in the broader community through an interdisciplinary approach.

Loma’s new PACE program will offer a wide variety of services, including clinical outpatient care, food service, primary care exams, physical therapy, cardiology specialties and much more.

The program is starting with about 20 participants and is expected to grow to 350. California now has over 19,000 participants in PACE programs throughout the state, according to CalPACE.

Axxess announces partnership with Stacy Olinger Consulting

Axxess — a home-based care technology company that provides agencies with cloud-based software solutions — has announced a partnership with Stacy Olinger Consulting.

Stacy Olinger Consulting is a tech and health care consulting firm with a focus on home care, post-acute throughput and chronic illness services.

“Our partnership with Axxess highlights our shared ethos of putting people first,” Stacy Olinger, founder and CEO of the company, said in a statement. “By combining our focus on human-centered strategies with innovative technology, we are able to give care teams more time at the bedside, improve satisfaction, optimize organizational efficiency and create sustainable and scalable growth solutions.”

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