Hospice and home health provider LHC Group (NASDAQ: LHCG) has seen its hospice admissions stabilize after a period of disruption stemming from the COVID-19 pandemic.
Even amid coronavirus headwinds, LHC Group’s hospice segment has continued to grow. The segment brought in more than $61 million during the spring quarter of 2020, representing roughly 13% of the company’s overall revenue with a nearly $6 million jump from the previous year’s quarter.
“When you look at [patient] census, when you look at admissions, both of those are on a real healthy trajectory,” said LHC Group Chief Financial Officer Joshua Proffitt in a presentation at the Baird 2020 Global Healthcare Conference. “On hospice, I’ve got to tell you that we’ve had two straight weeks north of 400 admissions. We had not had a week north of 400 all year, pre-COVID, during COVID, at any point in time, so we’ve got some real healthy growth coming in the door in hospice.”
The company anticipates further hospice growth through mergers and acquisitions throughout 2020 and into 2021. LHC Group is doubling down on hospice expansion through the last half of the year. Having voiced its intention to double its national hospice footprint last December, the company expects to cast a wider net in 2020 through acquisitions with joint venture partners.
LHC Group’s hospice M&A strategy has focused on acquisitions conducted through joint ventures, with an emphasis on co-locating hospices in markets where the company’s home health agencies are already operating.
In late August the company signed a joint venture deal with Augusta, Ga.-based University Health Care System that will bring its hospice and home health services to eight additional cities in Georgia and South Carolina. The companies expect to finalize the agreement Oct. 1. LHC Group will have majority ownership and take on management responsibility.
“We expect an acceleration in M&A activity in new hospital joint ventures, hospice acquisitions, and accelerate accelerated consolidation in the home health industry,” said LHC Group Chairman and CEO Keith Myers in a second quarter earnings call. “We fully expect even greater joint venture interest from hospitals and health systems in the future. Our pipeline of potential M&A growth opportunities is well-balanced between home health and hospice. Our M&A pipeline combined with our historic organic growth opportunity we see ahead from home health market absorption has us optimistic and bullish on both organic and M&A growth opportunities for the remainder of 2020 and beyond.”