The Pennant Group (Nasdaq: PNTG) has formed a partnership with Hartford HealthCare at Home (HHCAH), the home health and hospice segment of Hartford HealthCare.
The deal is a management and consulting services agreement, which has an aim of providing operational support to HHCAH.
“We have deep admiration for Hartford HealthCare and the commitment to home-based care it has long demonstrated through HHCAH,” Pennant CEO Brent Guerisoli said in a press statement. “We are thrilled to collaborate with Hartford HealthCare and contribute home health and hospice expertise to Hartford HealthCare’s impressive integrated care system. Hartford’s selection of Pennant is an honor and testament to the effectiveness of our unique operating model that empowers local leaders to transform operations and provide life-changing service in their communities.”
Eagle, Idaho-based Pennant is a holding company of independent operating subsidiaries located across the U.S., with a network that includes 113 home health and hospice agencies and 54 senior living communities.
On its end, Hartford HealthCare is a non-profit integrated health system in Connecticut. It’s home-based care arm has 8 locations and employs over 1,000 people.
As part of the agreement, Pennant will launch a service center based in Connecticut in order to support HHCAH’s operations. The center will deliver financial support services, human resources advising, information technology and more.
It is Pennant’s first time entering into Connecticut, and its only presence east of the Mississippi, besides Wisconsin.
“At Hartford HealthCare, we know that home-based care offers a more affordable, vital and expanding part of the care continuum, as more patients receive care in their homes every year,” Jeffrey A. Flaks, president and CEO of Hartford HealthCare, said in the statement. “This innovative collaboration with Pennant will help us create access for people who need and benefit from in-home care, improve our service offerings and programs, and allow us to provide high-quality in-home care utilizing the expertise of a national homecare leader. We are delighted that this engagement will also create jobs in Connecticut, and bring Pennant’s proven operating model to the East coast.”
Indeed, Pennant’s signature operating model includes the empowerment of local health care leaders and organizations.
Typically, Pennant accomplishes this through acquisitions, but with this partnership, HHCAH will remain under the ownership of Hartford HealthCare.
Still, Pennant is bullish on opportunities to achieve growth through other strategic means.
“We view the base establishment in CT as a prime opportunity for PNTG to pursue new markets and drive continued accelerated growth for the enterprise,” Stephens wrote in an analyst’s note.
However, Stephens also noted that fee-for-services reimbursement could be a deterrent to top line growth for Pennent’s home health business.
“Given the portfolio optimization initiatives, we recognize that [home health] segment top-line growth may be constrained in the N-T as FFS reimbursement will continue to be a notable industry headwind in 2024 and [Pennant] becomes more selective with its caseloads to drive margin improvement,” Stephen’s wrote. “We see Medicare [home health] reimbursement possibly hitting its trough in 2024 with potential improvements being additive to the company’s L-T initiatives already underway.”
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