Posted Wednesday, September 13, 2023
Consolidation in the home health market has been expected for years. However, the number of home health agencies has declined in recent years, we have not seen the mergers expected. That may change now due to declining traditional Medicare payment rates and a growing Medicare Advantage (MA) population.
Those factors are troublesome for almost all home health providers, but they also offer M&A opportunity.
“I think the rate environment that we’re experiencing, whether it’s through Medicare or Medicare Advantage, is going to put some pressure on small players,” VitalCaring CEO April Anthony said on a panel at Home Health Care News’ FUTURE conference. “I think if you don’t have some of those Medicare Advantage relationships, at a point, that becomes a limiting factor to your ability to grow. I anticipate a fair amount of consolidation, in spite of the fact that this might not be the highest multiple era that we’ve experienced in our last few years.”
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