Hospice and home health provider LHC Group (NASDAQ: LHCG) has acquired Santa Rita Hospice in Aurora, Colo. Santa Rita will rebrand as At Home Hospice and will share space with At Home Healthcare, LHC Group’s home health agency in that community.
Financial terms for the asset purchase were undisclosed.
Santa Rita’s average daily census is 15 patients. The transaction continues LHC Group’s strategy of purchasing small hospice providers in which they see potential for growth, particularly in markets in which the company already has a home health care presence.
“We look forward to expanding our scope of services in Aurora and the surrounding region with this purchase, and we see growth potential for hospice services in the market,” said Keith Myers, LHC Group chairman and CEO. “This transaction aligns with our strategy to co-locate home health and hospice services in markets where it makes sense – enabling us to reach even more patients and families with the quality care and service they deserve.”
Hospice utilization among Medicare decedents in Colorado reached 53.3% in 2018, the 13th highest in the nation, according to the National Hospice & Palliative Care Organization. The national average that year was slightly higher than 50%.
Demographic tailwinds will likely fuel further growth in both hospice and home health care in the state. About 13.8% of Colorado’s nearly 5.8 million residents are older than 65, according to the U.S. Census Bureau. This percentage is expected to double by 2050.
The size of the senior population in the local community and the presence of a co-located LHC home health agency in Aurora will also contribute to the acquired organization’s growth potential, as will a company sales leader living and working in the area, an LHC Group spokesperson told Hospice News.
The regional sales personnel in Colorado brought Santa Rita to LHC Group’s attention, ultimately leading to the transaction.
“One of our regional sales managers in the area and who is knowledgeable about the market, peers and competitors, etc., referred us to the hospice company,” the spokesperson said. “This is important because many times our very own employees are the ones who know the most in a market at the ‘street level.’ This belief lives in parallel with our position that ‘all health care is local.’”
The company announced the Santa Rita transaction just as it was finalizing a joint venture with August, Ga.-based University Health Care System to provide home health and hospice in that market. The JV expects to glean nearly $8.3 million in incremental annualized revenue.