Literature Review

Researchers raise concerns about the financial sector's rising role in US illness care Medical Xpress; by Mary Ann Liebert, Inc; 10/16/24 The authors of a new article in Journal of Palliative Medicine state that the "growing role of the financial sector in home health and hospice, a reflection of larger trends in U.S. health care, is concerning and has major implications for care quality unless reforms are undertaken." Co-authors Lauren Hunt, Ph.D., RN, FN, with the University of California, San Francisco, and R. Sean Morrison, MD, with the Icahn School of Medicine at Mount Sinai in New York, observe that home health and hospice began as nonprofit organizations with close ties to their communities. However, the overwhelming majority are now for-profit entities, many of which have become targets for private equity buyouts. The authors note that "big business's emphasis on maximizing profit can be at odds with patient welfare. Indeed, a substantial body of evidence now demonstrates that care quality is consistently worse in for-profits as compared to nonprofits," they state. The authors further express concern that "pressure to achieve high returns on very short-term time horizons may conflict with the need for longer-term investments in quality, training, and staffing, thus reducing care quality.

Optum’s home-based care arm propelling growth at UnitedHealth Group Hospice News; by Jim Parker; 10/15/24 UnitedHealth Group’s subsidiary OptumHealth is a growth engine for the massive health care and insurance company. In addition to other services OptumHealth holds a substantial home health and hospice business. Optum is in the process of acquiring the home health and hospice provider Amedisys (NASDAQ: AMED), with closing expected before the end of the year, pending some regulatory hurdles. Optum last June penned its agreement to acquire Amedisys in an all-cash transaction of $101 per share, or about $3.3 billion. The Amedisys deal is among a slew of large acquisitions by Optum, which include the home health and hospice provider LHC Group and the health care tech company Change Healthcare. Optum closed its $5.4 billion acquisition of LHC Group in February 2023. 

Private equity’s role in US healthcare remains unchecked after California veto The Guardian; by Jessica Glenza; 10/7/24 Hopes to rein in private equity investment in healthcare died in California last weekend, as a nationally watched bill was vetoed by the Democratic governor, Gavin Newsom. The bill was the nation’s most high-profile legislative effort to regulate such investments in healthcare, and would have given the state attorney general discretion to deny mergers.Its demise comes amid US Senate hearings over mismanagement at Steward Health, a chain of more than 30 private equity-backed hospitals in Massachusetts whose CEO and investors siphoned “hundreds of millions” of dollars from community hospitals even as they developed one of the worst patient care records in the country. 

Vitas Healthcare introduces premier hospice care in Bakersfield and Fresno GlobeNewswire; by Vitas Healthcare; 10/1/24 To meet the growing need for quality end-of-life care in California’s Central Valley, Vitas Healthcare hospice services are now available for residents of Bakersfield and Fresno. With local interdisciplinary teams based in each city, Vitas now offers expert clinical, emotional and spiritual care for seriously ill patients in their homes, nursing homes, assisted living communities and inpatient care settings. 

Hospital mergers and health care price increases: A primer for reporters Association of Health Care Journalists (AHCG); by AHCG Staff; 9/24/24 Hospital mergers — market consolidation — can lead to health care price increases of anywhere from 3% to 65%, according to a 2022 RAND Corporation review. The FTC’s director of the Bureau of Economics has said hospitals that merge may charge 40% to 50% more than if they hadn’t merged. Mergers can also result in layoffs and lower tax revenues and have a negative impact on patient care by reducing access to some health care services. With so much research confirming negative effects and as health care prices continue to rise, what — if anything — can be done to slow market consolidation and/or reduce the harms to patients and local economies?

Gentiva leaning into staff development, advanced illness management business Hospice News; by Jim Parker; 9/23/24 Gentiva in 2024 and 2025 is laser-focused on staff retention and building out its palliative care platform Empatia. ... Gentiva, among other initiatives, is investing in staff education to help develop clearer career paths, stave off burnout and boost retention, according to Chief Clinical Officer Jacqueline Lopez-Devine. “Education is very, very important to the concept of staff retention — taking newer staff that walk into the industry. We have thoughtful training programs that teach them even the concept of work-life balance, professional balance,” Lopez-Devine told Hospice News. “It’s really important that, as organizations, we teach our team members those concepts of joy in work, taking care of self and professional boundaries. That’s what’s going to make us different in some of these other health care industries that maybe don’t take the time.” ... Gentiva is a portfolio company of the private equity firm Clayton, Dubilier & Rice (CDR). The Atlanta-based provider emerged from the former hospice and personal care segments of Kindred at Home. CDR in 2022 purchased a 60% stake from the insurance mammoth Humana, Inc., for $2.8 billion. The firm later rebranded the hospice provider as Gentiva.

Ascension posts $1.8B annual loss; liquidity 'remains strong,' CFO says Becker's Hospital CFO Report; by Alan Condon; 9/18/24 St.Louis-based Ascension reported a $79 million operating loss (-0.3% margin) for the 10 months ending April 30, a substantial improvement on the $1.2 billion operating loss in the previous 10-month period. The results include $402 million in one-time, non-cash write-downs and non-recurring losses. In May and June 2024, operations were hampered by the May ransomware attack, resulting in reduced revenues from the associated business interruption along with costs incurred to address the issues and other business-related expenses. Despite this incident, Ascension drove a $1.2 billion operational improvement year over year for the 10 months ending April 30. The 136-hospital system's economic improvement plans focused on volume growth, rates and pricing, and cost levers. 

How the Fed’s interest rate cuts could affect hospice M&A Hospice News; by Jim Parker; 9/19/24 The Federal Reserve cut interest rates by 0.5% on Wednesday, which will likely have an impact on hospice M&A. Interest rates have widespread implications for the hospice mergers and acquisitions market, particularly when it comes to private equity investments. PE firms, and some publicly traded companies, tend to finance their acquisitions by taking on debt. The rate reduction — from close to 5.5% to between 5% and 4.75% — means that the flow of dollars may pick up as borrowing gets less expensive. The slash in interest rates could result in a resurgence of M&A in the hospice space through the end of the year and into 2025, according to Cory Mertz, managing partner at M&A advisory firm Mertz Taggart. ...

Private Equity's impact on hospice care: The good, the bad, and the ugly of private equity TCN Talks - Teleios Collaborative Network; by Chris Comeaux; 9/18/24 In this episode, Private Equity's Impact on Hospice Care, The Good, the Bad, and Ugly of Private Equity, Chris interviews Laura Katz Olson, a professor of political science at Lehigh University.  It’s a fascinating discussion based on Laura’s book Ethically Challenged. During their conversation, they delve into the impact of private equity in the healthcare industry.  Private equity firms prioritize making oversized profits and have a short-term focus, often selling companies within six years, relying heavily on debt financing and putting the burden of servicing the debt on the acquired companies.  Leaving a company worse than when the started is the opposite of what leadership is supposed to do for any organization, especially one with such a critical mission. Editor's note: TCN /  Teleios Collaborative Network sponsors our newsletter. 

Destin welcomes its first inpatient hospice care center: Vitas suites destination health and rehabilitation South Florida Hospital News, Destin, FL; by cfelixcpa; 9/13/24 Patients nearing the end of life who reside in Okaloosa and Walton counties now have access to inpatient hospice care at the VITAS Suites at Destination Health and Rehabilitation in Destin, Florida. This is the first and only inpatient unit for hospice patients in the two-county region. The nation’s leading provider of end-of-life care celebrated the grand opening of the new suites and is now accepting hospice-eligible patient referrals. ... “The new suites help VITAS further serve the greater community of Pensacola, filling a vital need for acute symptom management for end-of-life patients in the area,” said VITAS General Manager Chasity Tedford. 

Crossroads Hospice & Palliative Care is primed for continued success 9/13/24; Business Wire - Crossroads Hospice & Palliative Care; by Lisa Simon; 9/13/24 Crossroads Hospice & Palliative Care, the leading end-of-life care company, is affirming its commitment to growing its four Ohio locations in Cleveland, Northeast Ohio, Cincinnati and Dayton along with two others, one outside Philadelphia, Pennsylvania and one in Memphis, Tennessee. “We are committed to building our remaining locations and we have the depth of talent and proven standards for the highest quality care and the most time spent bedside, including attended deaths, compared with any other hospice. This is an opportunity for Crossroads to reach its highest potential.” That’s after selling five locations in Missouri, Kansas, Oklahoma and Georgia to Spartanburg, SC-headquartered Agape Care Group, a portfolio company of Ridgemont Equity Partners, earlier this week. Crossroads had been considering a strategic sale of some locations for a number of reasons. Now company leaders are viewing the future of the 29-year-old leader in hospice and palliative care with enthusiasm as they become a more streamlined company with a smaller geographic footprint. “The potential for innovation has never been higher,” said Crossroads CEO and Co-Founder Perry Farmer. “We are committed to building our remaining locations and we have the depth of talent and proven standards for the highest quality care and the most time spent bedside, including attended deaths, compared with any other hospice." ... COO and Co-Founder Clayton Farmer agreed while acknowledging how entrenched Crossroads is in the markets where it operates. “We want our valued referral partners in Ohio, Pennsylvania and Tennessee to know we are here to continue serving their patients and families and we will strive to continue to beat all national averages on key hospice industry metrics.” 

Bayada Home Health Care settled nurses’ wages class action lawsuit for $13.5 million Head Topics - Daily Botique; 9/13/24 The settlement, if approved by a judge, will cover nearly 11,000 Bayada nurses in Pennsylvania. Bayada Home Health Care Inc., one of the nation’s largest home care providers, agreed to settle a class-action lawsuit in Philadelphia alleging the company failed to pay nurses for time spent updating the incoming nurse or caregiver on a patient’s condition and for time spent in mandatory training sessions the $13.5 million Philadelphia Court of Common Pleas settlement.Editor's note: Additional information is behind a paywall at the Philadelphia Inquirer.

Tennessee health-care company enters Triad with acquisition of White Oak of Burlington Triad Business Journal; by David Hill; 9/11/24 National Healthcare, a publicly traded company from Nashville, acquired Alamance County facility as part of larger purchase of senior living centers. ... It also has three behavioral health hospitals, 34 homecare agencies and 30 hospice agencies, in addition to Alzheimer’s and memory care units and related operations. ... [Additional subscription may be required.]