One anticipated trend that did not come to fruition in 2016 was hospitals entering the home health & hospice space. The advent of bundled payments placed tremendous emphasis on providers to control the patient engagement from start to finish, making it almost imperative for health systems to secure post-acute care providers in the home health and rehabilitation sectors.
In 2012 and 2013 combined, there were only two deals involving a hospital purchasing a home health & hospice company. In 2014 and 2015, there were just two deals each year, and in 2016 we saw three. However, in the first month of 2017, three hospital groups have purchased home health & hospice companies.
Value-based care models incentivize hospitals to provide quality care services in a less-costly environment. For this reason, it is in their best interest to offer the same high acuity of care in an outpatient setting. In 2014, the Centers for Medicare & Medicaid Services (CMS) granted $10 million to the School of Medicine at Mount Sinai to fund its Mobile Acute Care Team services. The experiment allows selected hospital patients to receive their “hospital” care at home, including visits from appropriate doctors and clinicians, as well as use of mobile hospital equipment.
If the Mount Sinai experiment posts positive results, the CMS may come up with a corresponding reimbursement model for the futuristic “hospital at home” care setting. We expect this to break down more barriers to hospitals buying up home health companies. But some companies may already be looking to get a head start.
Banner Health, a not-for-profit owner and operator of 28 hospitals in six states, was the first to announce a deal of this kind in 2017. Banner Home Care, the home health division of Banner Health, is the largest home health service provider in Arizona, and its parent company added its first home health outpost in the southern Arizona market with the acquisition of SunLife Home Health. SunLife Home Health is a Medicare-certified home health agency that has been in the Tucson market since 2010. The price was not disclosed.
Next up was not-for-profit Northwell Health, Inc., formerly known as North Shore-LIJ Health System, which includes more than 20 hospitals on Long Island, New York City and Westchester County. On January 25th, it acquired Visiting Nurse Association (VNA) of Hudson Valley, a non-profit, certified home health agency that includes a hospice agency and a VNA and hospice care foundation.
VNA of Hudson Valley filed a Certificate of Need with the state Department of Health in December 2016 for the deal, which will add the first Westchester home health network for Northwell Health.
