Hospice and home health care provider LHC Group (NASDAQ: LHCG) and its joint venture partner Lifepoint Health has agreed to acquire two hospices — Casa de la Paz Hospice in Sierra Vista, Arizona; and St. Joseph Family Hospice in Lewiston, Idaho — in separate transactions for undisclosed amounts.
The companies expect to close the transactions on Dec. 1, along with Ohio-based CMH Home Health Care which the joint venture has also acquired. The acquired hospices will not rebrand.
LHC Group anticipates $3.6 million in annualized revenue to result from these purchases, but indicated that it will not significantly impact the company’s diluted earnings per share.
The transactions continue LHC Group’s hospice growth strategy of bi-locating and tri-locating new hospice locations in markets in which the company’s home health care segment already has a presence, mostly through acquisitions involving joint venture partnerships.
“We already have a presence in both of these great states. This includes eight home health and two hospice providers in Arizona, and four home health and two hospice providers in Idaho,” a company spokesperson told Hospice News. “These two new hospice locations are regional care providers and part of planned growth and an extension of our [joint venture] with LifePoint Health. We are committed to growing with our [joint venture] partners and helping expand their services in current and new markets.”
The LHC Group and LifePoint Health established their joint venture in 2017. The companies share ownership of Lifepoint’s 46 hospice and home health agencies, located throughout eight states.
The Arizona market is becoming increasingly important to hospice companies due to the state’s evolving demographics. Currently, 17.5% of the state’s nearly 7.2 million residents are age 65 or older, according to the U.S. Census Bureau. By 2050 that number is expected to rise to 21%, according to the Arizona Department of Health Services (ADHS).
Between 2010 and 2015 ADHS anticipates that the number of Medicare-age residents in the state will increase 174% and that the number of seniors older than 85 will quadruple from 2010 levels. Nearly 65% of Medicare beneficiaries who died in hospice nationwide during 2017 were 80 or older.
Hospice utilization also runs high in the state. In 2017, Arizona had the second-highest number of Medicare decedents who died in hospice at 59.2%, behind only Utah at 59.4%, according to the National Hospice & Palliative Care Organization (NHPCO).
Idaho is 14th in the nation for utilization, with 51.9% of Medicare decedents electing hospice in 2017, NHPCO reports.
The Idaho population is aging faster than the national average. The number of state residents age 65 or older rose 30% between 2010 and 2016 compared to 22% for the nation, according to the U.S. Census Bureau. Individuals born between 1946 and 1964 represent 15% of the Idaho population.
“We are encouraged and excited by the continued growth and success of our partnership with LifePoint Health” said Keith Myers, LHC Group chairman and CEO. “Our goal is to help our JV partners expand their footprint, enhance access to these services, and create healthier communities across the country. We look forward to bringing quality, affordable care to even more patients in cooperation with our colleagues at LifePoint.”