We don’t need to tell you that the pandemic enabled healthcare to be delivered in the home at historic rates, as patients could see doctors on Zoom, medications could be delivered, and home health aides could provide other care and services. Anything to avoid the dreaded hospital or nursing home while COVID was raging.
Coming back from the Spring NIC in Dallas, where we saw abundant optimism (and some caution from a few of you), one may not think this will be a huge threat. But UnitedHealth Group’s potential acquisition of home health provider LHC Group for a reported $5.4 billion reminds us that the penetration rate for in-facility senior care services is always on the verge of falling. This is the second-largest home health deal ever reported according to our statistics, second only to Humana’s acquisition of a 60% stake in Kindred at Home for $5.7 billion just last April. But both deals were made by managed care organizations, who certainly have an eye towards value and keeping costs low.
Of course, with the pandemic came the staffing crunch, which would greatly affect home health businesses and their narrow operating margins. But senior care faces this and other headwinds too, and while the industry provides a service that many seniors want and need, competing with the comforts of home will require a huge effort on the industry’s part to manage senior care’s image and to educate the public on its benefits. Then maybe we’ll get managed care’s attention.
