Posted on Friday, April 12, 2019 12:07 AM
Due to operational changes and cash flow operations that Patient Driven Groupings Model (PDGM) will cause, it may lead to more home health bankruptcies than normal. It may also lead to more mergers and acquisitions (M&A).
“I agree with the premise that some home health companies will struggle through the [PDGM] change and will probably either face bankruptcy or a fairly quick acquisition, needing to sell themselves,” Stoneridge Partners President Rich Tinsley told Home Health Care News. “But I don’t think that’s a long-term result.”
“I think you’ll see smaller providers or the ones that aren’t prepared for PDGM struggling with cash flow, with some of that ultimately being a good thing for more stable companies looking to make acquisitions,” Tinsley said. “Probably at very attractive valuations.”
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