Reasons For Private Equity Setting Sights On Home Care

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In the home health care service sector, the private equity is setting sight in a big way. Such tumultuous wind is gaining strength with each passing day with intent to acquire and combine both paying and providing which will surely benefit the patients overall. There is a long list of names which shows the potential of this industry and the possibility of the quick turnover.

Large private equity firms are looking for such acquisitions which are substantiated by the research report of Irving Levin & Associates data that shows that:

  • There are about 22 acquisitions occurred in the third quarter of 20018 alone and
  • Out of these, 13 of them accounted for the private equity firms or their portfolio companies.

It can be concluded from this results that there are more such acquisitions coming up in 2019 and the valuation of it will continue to rise. In addition to that, experts and stakeholders also suggest that rollups will also start to happen. This will eventually increase the scale of home care, home health care services and hospice portfolios of these companies.

The referral patterns

There is also a shift noticed in the referral patterns that leads to a common and important question while looking forward to 2019. This is, whether or not the agencies will start to find ways to get an increased number of referrals through the existing health care providers or through the consumer word of mouth marketing.

As of today, the traditional word of mouth marketing is still by far the best referral source for generating revenue especially for the private home care agencies. This fact is corroborated by the latest annual industry survey report of Home Care Pulse. It further adds that:

  • About one-fifth of the past and present clients reported that their top referral source was their family members and loved ones.
  • As for the joint venture partnership there are some more interesting home care collaborations expected in 2019.

However, the emphasis of such collaborations is mostly on value proposition whether it is for individual patient care or a whole person care.

Consumer confusion factor

It is expected that consumer confusion will worsen as there will be little knowledge about the difference between home health and home care. However, people cannot be blamed for their little knowledge but in due course of time this line of difference is bound to blur due to several reasons such as:

  • The personal home health care agencies will start to beef up their clinical abilities
  • Medicare Advantage will start paying for home care and
  • Consolidation will occur to bring both home care and home health care under a single ownership.

Furthermore, steps will be taken by the home care service providers to educate the consumers on the value of home care. They will start to launch new and more ambitious advertising campaigns. They will also focus on spending more time on explaining such values to individual clients, hospitals as well as health system associates.

Correlated to this consumer confusion worsening, it is also expected that the home care industry will devote more time, energy and resources into educating the federal policymakers regarding several aspects such as:

  • The ways in which home care services become pre-acute
  • It is not an alternative for just the older adults
  • It is necessary for those patients also who suffer from specific medical conditions and
  • It is also necessary for any patient after returning from hospital stays or recovering from a surgery.

This has ideally been the major point for almost all home health providers, large or small and it specifically applicable to the entire home care industry as well.

Therefore, look for ads for and after merger and acquisition when you visit the upcoming Super Bowl where the average cost for a 30-second spot can be as high as $5 million! The fact that the private equity companies are willing to spend such a high amount signifies the prospects in and the importance of home health care industry.

Enhancing health care delivery

From the perspective of the consumers, such mergers and acquisitions in the home care industry by the private equity firm will enhance health care delivery.

  • This is because the medical care providers will have the natural opportunity to work together with the home care provider which will ensure better monitoring and a consistent care for the seniors since better communication is the key factor to achieve the desired outcome in home health care.
  • It will allow the seniors to age in place instead of a hospital. This will enhance their life quality and expectancy, better their health and other physical activities. Living in their known and own surroundings they will experience a better mental health condition as well.
  • Use of modern technology in home health care will also allow the clients to ask for and take the full advantage of Tele-health option which will be a new addition in the home medical care sector.

This Tele-health option is growing increasingly popular and emerging in this field. It has all the desired potential and features to be a truly effective tool to save lives of people suffering from chronic and complex medical conditions. It can provide a lot of benefits to the seniors such as:

  • It can reduce hospitalization needs and ER visits
  • It can make easier for the seniors to monitor their progress
  • It will help them in regular check-ups even from the comfort of their homes.

With so many benefits and with further realization by the seniors about its benefits, Tele-health is sure to become a part of the health care continuum.

Therefore, with such a rise in home care service providers due to the inclusion and increased participation of the private equity firms in this field, seniors care needs will change gradually transitioning from the common non-medical home care to more clinical and specialized home health care. This will provide them with a better and more affordable chance to age in place and live even longer with independence that they desire with the care they duly deserve.

About the Author

Danish Mehmood
My name is Danish mehmood.I am blogger and freelance writer.I publish articles on many websites.You can contact me any time.My email id is s0542599232@gmail.com .You can Contact me anytime for Guest Post.

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