Literature Review

Nursing Home Compare star ratings before versus after a change in nursing home ownershipJournal of the American Geriatrics Society; by Kira L Ryskina, Emily Tu, Junning Liang, Seiyoun Kim, Rachel M Werner; 7/24Nursing Home Compare ratings decreased slightly after a change in facility ownership, driven by lower staffing and health inspection ratings and mitigated somewhat by higher quality measure ratings. These conflicting trends underscore the need for transparency around changes in facility ownership and a better understanding of consequences of changes in ownership that are salient to patients and families.Publisher's note: This article might have interesting implications in the hospice field.

Ensign Group expands with new Colorado and Kansas acquisitions Investing.com, San Juan Capistrano, CA; by AI and reviewed by an editor; 9/3/24 The Ensign Group , Inc. ... has expanded its portfolio with the acquisition of seven skilled nursing facilities in Colorado and one in Kansas, effective September 1, 2024. These facilities, which are now subject to long-term, triple net leases, bring Ensign's total operations to 323 healthcare facilities across fourteen states. The Colorado acquisitions include Desert Willow Health and Rehabilitation Center in Pueblo, Junction Creek Health and Rehabilitation Center in Durango, Pelican Pointe Health and Rehabilitation Center in Windsor, Riverbend Health and Rehabilitation Center in Loveland, Broadview Health and Rehabilitation Center and Westlake Lodge Health and Rehabilitation Center both located in Greeley, and Linden Place Health and Rehabilitation Center in Longmont. In addition, Ensign has acquired Prairie Ridge Health and Rehabilitation in Overland Park, Kansas. These latest acquisitions reflect the company's ongoing strategy to grow its presence in the healthcare sector by acquiring both well-performing and underperforming facilities.

Private equity ownership of US hospice centers boomed in recent years – studyThe Guardian; by Jessica Glenza; 9/3/24Investors spent about $1tn buying healthcare facilities over last decade, leading to reports of worsening patient care. Private equity investors are increasingly buying up hospice centers – healthcare facilities meant to focus on pain relief and emotional support for people near the end of their lives. The new study was published in the journal Health Affairs [Private equity acquisitions of hospices are increasing; Ownership remains opaque, by Melissa D. Aldridge, Lauren J. Hunt, Zelle Halloran, and Krista L. Harrison] and provides more evidence of how private equity have acquired firms using often sophisticated and opaque ownership structures. Although for-profit ownership is not new in US healthcare, the surge of private equity ownership is. Such investment groups have spent an estimated $1tn over the last decade, buying up hospitals and doctors’ offices.

BrightSpring Health Services announces definitive agreement to acquire Haven Hospice, expanding hospice services into Florida Business Insider, Louisville, KY; by Globe Newswire Press Release; 9/3/24BrightSpring Health Service ... announced that it completed the acquisition of the assets of North Central Florida Hospice, Inc. and Haven Medical Group, LLC (collectively “Haven Hospice”), a Florida-based company holding a Certificate of Need (CON) for comprehensive hospice care services in 18 counties in north central Florida, effective September 1, 2024. “We are excited to welcome Haven Hospice into BrightSpring, expanding our existing hospice services into the CON state of Florida,” said BrightSpring’s President and CEO Jon Rousseau.  

Bon Secours Mercy Health partners with private equity-owned provider[VA] VPM; by Adrienne Hoar McGibbon; 8/27/24There is a growing demand for hospice care in Virginia. 40,000 people received hospice care in the state in 2023, according to the U.S. Centers for Medicare and Medicaid Services. The joint venture with Compassus plans for expanded hospice and home health care. Bon Secours Mercy Health’s home health and hospice care division is teaming up with national home health care provider Compassus as part of a newly minted partnership. The home health and hospice program will now be called Bon Secours Home Care and Hospice by Compassus... The merger will also impact BSMH locations in Florida, Illinois, Kentucky, Ohio and South Carolina.

Protecting patients and society in an era of private equity provider ownership: Challenges and opportunities for policyHealth Affairs; by Christopher Cai, Zirui Song; 5/24Private equity (PE) acquisitions in health care delivery nearly tripled from 2010 to 2020. Despite concerns around clinical and economic implications, policy responses have remained limited. We discuss the US policy landscape around PE ownership, using policies in the European Union for comparison. We present four domains in which policy can be strengthened.

Why Optum thrives where other companies failed Becker's ASC Review; by Patsy Newitt; 8/16/24 UnitedHealth Group's Optum, parent company of Deerfield, Ill.-based ASC chain SCA Health, has seen massive growth in the last few years as other big healthcare networks face obstacles in reaching large-scale profitability. ... A key to Optum's success is its affiliation with a large insurance business. The Journal pointed to the "several financial incentives for an insurer to own a health provider, including that it pays itself." ... And Optum keeps growing. The company spent $31 billion on acquisitions in the last two years, The Oregonian reported May 13. ... UnitedHealth Group is facing scrutiny regarding the Change Healthcare ransomware attack in February. The attack delayed payment and claims processing for healthcare providers around the country, as UnitedHealth subsidiary Change Healthcare handles an estimated one in three healthcare transactions.

4 health systems shrinking their hospital portfolios Becker's Hospital Review; by Alan Condon; 8/14/24 Merger and acquisition activity is picking up steam this year after a decline in deal volume during the pandemic, with some large health systems reorganizing their portfolios and offloading hospitals in various markets. Four health systems that have sold or plan to sell multiple hospitals this year:

3 of the fastest growing hospice companies Hospice News; by Jim Parker; 8/16/24 Three of the nation’s for-profit hospice companies have hit the accelerator on revenue growth, achieving triple-digit percentages. Each of these organizations — Traditions Health, Fortis Health and HealthFlex Hospice — appeared on Inc. magazine’s 2024 listing of the fastest-growing private companies in the United States. ... 

On-demand talent can push key objectives forward amid an increase in M&A deals Forbes; by Sunny Ackerman; 8/14/24 As we settle into the latter half of 2024, mergers and acquisitions and other business transformation initiatives are likely to be top of mind for many business leaders. Consider EY’s May 2024 “Deal Barometer,” which predicts that in the United States, “corporate M&A deal volume will increase 20%.” The firm also estimated that M&A deal volume will increase by 16% in the private equity world. ... Given the projected increase in M&A deal activity, I expect to see an increased need for on-demand talent in 2024 and beyond to push key objectives forward, executing strategic goals to close deals and facilitate seamless transitions post-closure. ...

Hospital assets before and after private equity acquisitionJAMA; by Elizabeth Schrier, Hope E M Schwartz, David U Himmelstein, Adam Gaffney, Danny McCormick, Samuel L Dickman, Steffie Woolhandler; 7/24Private equity firms spent $505 billion on health care acquisitions between 2018 and 2023. Financial infusions may augment resources for care. However, firms have sometimes sold acquired hospitals’ land and buildings, repaying investors with proceeds and burdening hospitals with rent payments for facilities they once owned. We assessed changes in hospitals’ capital assets after private equity acquisition. After private equity acquisition, hospital assets decreased by 24% relative to that of controls during 2 years. Private equity acquisitions appear to have depleted, rather than augmented, hospital assets. Although funds from asset drawdowns might be redeployed to enhance care or efficiency, previous studies suggest such effects may not occur.

R1 RCM to be acquired by TowerBrook and Clayton, Dubilier & Rice for $8.9 BillionTowerbrook press release; 8/1/24R1 RCM Inc. (NASDAQ: RCM) (“R1” or the “Company”), a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers, today announced that it has entered into a definitive agreement to be acquired by investment funds affiliated with TowerBrook Capital Partners and Clayton, Dubilier & Rice, in an all-cash transaction with an enterprise value of approximately $8.9 billion.Publisher's note: Both TowerBrook and Clayton, Dubilier & Rice are active in the hospice private equity space.

New proposed federal legislation takes aim at concerns regarding perceived “looting” of health care systems by private equity investors JDSupra - Epstein Becker Green; by Melissa Jampol, Enrique Miranda, Kathleen Premo; 7/26/24On June 11, 2024, U.S. Senators Ed Markey and Elizabeth Warren from Massachusetts, introduced proposed legislation titled The Corporate Crimes Against Health Care Act (“CCAHCA”), aimed at addressing a perceived “looting” of health care systems by for profit private equity investors. According to Sen. Warren, the bill was introduced to “root out corporate greed and private equity abuse in the health care system,” “prevent exploitative private equity practices,” and to specifically ensure that actions such as “looting” do not happen again by addressing trigger events and targeting real estate investment trusts. ... Finally, the CCAHCA would require health care entities, including, but not limited to:  ... a hospice program, a home health agency, ... to publicly report to the Secretary of Health and Human Services on an annual basis: (i) transactions entered into ... [Click on the title's link to continue reading.]