Traditions Health Acquires Pathways Hospice

Hospice and home health provider Traditions Health, LLC, has acquired Tucson, Ariz.-based Pathways Hospice for an undisclosed amount. 

Traditions, based in College Station, Texas, provides hospice, home health care and consulting services to more than 1,800 patients in Texas, California and Arizona. Traditions is a portfolio company of family-owned investment firm Dorilton Capital Advisors. 

 Traditions has been active in the hospice mergers and acquisitions market during that past two years. The company entered the California market in 2018 through its purchase of ProCare Hospice Corporation, headquartered in Oxnard, Calif., for an undisclosed sum. Also during 2018, the company acquired Family First Hospice, Inc., and Family First Palliative Care, Inc., growing its presence in the greater Dallas area.

Earlier this year Traditions purchased Tyler, Texas-based Hospice Connection, and subsequently completed a transaction to obtain Reflections Hospice and Palliative Care in Mesa, Ariz.

“Traditions already has a location in Phoenix,” Cory Mertz, managing partner for the M&A advisory firm Mertz-Taggart, said. “Tucson is a natural extension for them. I’m sure it was the right opportunity for them at the right time.” 

Demographic tailwinds have been heating up the Arizona market during 2019. In 2017, Arizona had the second-highest number of Medicare decedents who died in hospice at 59.2%, trailing only Utah at 59.4%, according to the National Hospice & Palliative Care Organization (NHPCO).

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.

Though Dorilton Capital Advisors, which owns Traditions, is not technically a private equity firm, the company’s presence in the hospice space is emblematic of private investors’ increasing interest in the hospice space.  

“They function a lot like a private equity group, they just don’t have the burden of having to sell within a certain period of time,” Mertz told Hospice News. “Private equity is trying to get into hospice any way they can, because hospice is profitable, more profitable than home health. It’s a part of an ongoing trend towards industry consolidation in the post-acute space.”