LHC Group Inc. (Nasdaq: LHCG) executives end the “sugar high” felt by some underfunded home healthcare providers after receiving federal support related to the COVID-19 pandemic. I believe we are approaching.
As a result, consolidation has begun to increase again, setting a potentially record-breaking year for trading. Prior to the coronavirus, most industry insiders expected 2020 to be a historic year for M & A, with a patient-driven grouping model (PDGM).
Keith Myers, Chairman and CEO of the LHC Group, said in a presentation at the annual JP Morgan Healthcare Conference Wednesday, “As a result of PDGM, this historic integration opportunity in the industry will be realized in home health care. I’ve been expecting it. ” “The pandemic and stimulus fund temporarily prevented it, but the integration was developed in many positive ways that we didn’t initially anticipate.”
Headquartered in Lafayette, Louisiana, the LHC Group provides home health, hospice, and personal care services in 35 states and the District of Columbia. In addition to being a fully owned home care facility, the company is also a joint venture partner with nearly 400 hospitals and healthcare systems.
Together, the five largest home healthcare providers, Kindred, Amedisys Inc. (Nasdaq: AMED), LHC Group, Encompass Health Corp. (NYSE: EHC), and AccentCare Inc., still have only 20% of the domestic market share. Does not occupy.
Finally, the LHC Group is working to carve out a larger part of the pie in 2021 by pulling multiple levers.
These plans include new entry into new markets and maintenance of organic growth across existing businesses. The company also expects to continue to negotiate better rates with non-Medicare payers of service fees while adding new referral sources.
Overall, the LHC Group saw a 22% increase in new doctor referrals in 2020 compared to the previous year.
“This is a very fragmented industry,” Myers said. “And the market is ripe for integration.”
By number: LHC Group’s “growth lever”
The LHC Group has achieved particularly strong growth in the JV business as a whole. This is partly due to public health emergencies, and hospital and healthcare partners are heavily dependent on the LHC Group as they transfer a variety of care to their homes.
For example, in the fourth quarter of 2020, the number of visitors to the LHC Group’s fully owned home healthcare business decreased by 0.7% year-on-year. Admission to the same JV store increased 6.5% compared to that.
Meanwhile, in the third quarter of last year, the number of visitors to the store in the company’s wholly owned home medical segment increased by 2.8% year-on-year, and the number of visitors to the joint venture increased by 7.4%. Q1 and Q2 had the same breakdown.
“We have never actually presented data that would break down the organic growth between the joint venture and the wholly owned assets,” said Joshua Profit, president of the LHC Group, at the JP Morgan Healthcare Conference. “But I think it’s a very compelling story to further promote the differentiated strategy we have in JVs.”
When it comes to external acquisitions, executives say the LHC Group’s M & A team is starting to see more inbound calls.
That was the case in early 2020, until the market froze due to the COVID-19 virus.
“The pipeline was robust,” Myers said. “And I know by name many of the providers that should have been integrated this year.”
For traditional non-Medicare benefits, the LHC Group increased temporary non-Medicare hospitalizations by approximately 35% in 2020 compared to 2019. In addition, the majority of these hospitalizations were comparable to Medicare.
The company’s percentage of all non-Medicare payers per visit increased by 8% in 2020 compared to 2019. This has improved by almost 12% over the last three years, reflecting the growing awareness of payers about home care.
“There is an unprecedented tailwind,” said Myers.
COVID-19 volume hits new highs
According to the company, the LHC Group’s home health care census has fully recovered after overcoming the turmoil associated with COVID-19 last spring.
In the fourth quarter of 2020, the LHC Group’s average daily home health census reached 83,686 patients, an increase of 6,700 from the first quarter. Hospice admission has increased as well.
The company has recovered from coronavirus-related challenges, but can still feel the effects of the pandemic that continues to hurt the United States. According to Johns Hopkins University counts, the United States has surpassed 4,300 deaths on Tuesday alone. The best of the day.
In total, the LHC Group admitted 7,046 COVID-positive home care patients in the first three quarters of last year. Then, in the fourth quarter alone, we accepted 7,544 COVID-positive patients.
“I think it really helps me get home … the value proposition and what we were able to prove throughout. [duration] About this pandemic of what the benefits of home health care can provide to patients, “Profit said. “I think it also shows the spikes we all saw and all the national numbers throughout the fourth quarter, which also started in the first quarter. We are all suffering from the virus. We are really happy and proud of our frontline workers for the work they were able to do, taking care of their patients. “
Integration accelerates as home healthcare providers clash from the stimulus “sugar high”
Source link Integration accelerates as home healthcare providers clash from the stimulus “sugar high”