|FOR IMMEDIATE RELEASE||Lisa Phillips
NORWALK, CT – January 17, 2017 – With the uncertainty surrounding the presidential election and the future of the Affordable Care Act, home health and hospice M&A activity slipped a little in the fourth quarter of 2016, according to new acquisition data from HealthCareMandA.com. There were 11 publicly announced home health and hospice mergers and acquisitions, compared with 11 in the third quarter and 13 in the year-ago quarter. Even though the fourth quarter represented the lowest level of M&A activity since the second quarter of 2015, when there were just six acquisitions, the quarterly average is normally close to 12 or 13 transactions. MedPAC continues to recommend cuts in Medicare reimbursement for home health care, claiming margins remain too high on Medicare payments. But with federal and state pressure to provide more funding for home and community-based supports and services, the home health and hospice business should continue to grow, especially as the population ages.
For the full year, based on preliminary numbers, there were 55 publicly announced home health and hospice acquisitions, representing an 8% increase over the 51 transactions in 2015. Private equity companies, however, are still investing in the space, and despite short-term economic uncertainties, most indicators point to an expanding use of home health and hospice services, which bodes well for M&A activity. In the fourth quarter, only one transaction disclosed a purchase price, and that was the $128 million acquisition for an 80% interest in Community Health Systems’ home health division by Almost Family. The division has annual revenues of approximately $200 million and operates 74 home health and 15 hospice branch locations in 22 states. Clearly, this was one of the most significant deals of the year in this sector. Other buyers in the fourth quarter included Epic Health Services with two acquisitions and The Ensign Group, a major long-term care provider. “With the election behind us, we expect home health and hospice M&A activity will increase, despite the headwinds of repeal and replace the ACA. The push for care at home is just a train that will not stop,” stated Lisa Phillips, Editor of the Health Care M&A Report.
All quarterly results are published in The Health Care M&A Report for all 13 sectors of health care, which is part of the HealthCareMandA.com. For information, or to order the report, call 800-248-1668. Irving Levin Associates, Inc. was established in 1948 and has headquarters in Norwalk, Connecticut. The company publishes research reports and newsletters, and maintains databases on the healthcare and senior housing markets.
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