Cornerstone Healthcare, the hospice and home health subsidiary of the Pennant Group, Inc. (NASDAQ: PNTG) has opened two de novo hospice agencies: Everett-Wash.-based Alpha Home Health and Hospice and Peaceful Heart Hospice, located in Murrieta, Calif.
Alpha, which already provided home health services, received a certificate of need from the Washington State Department of Health to launch the new hospice program in Snohomish County in that state. Peaceful Heart will serve two California counties, Riverside and San Bernardino.
“These start-ups illustrate some of the many levers available to our local leaders to accelerate growth in existing and new markets,” said Daniel Walker, Pennant’s CEO. “As part of our disciplined growth strategy, local leaders worked closely with a dedicated development team and resources throughout the organization to identify these opportunities and successfully bring them to fruition after rigorous application and review processes.”
Pennant in 2019 spun off from The Ensign Group (NASDAQ: ENSG). Pennant retained Ensign’s hospice, home health and senior living operations.
Hospice utilization rates among Medicare descendants in 2018 in the California and Washington state markets were comparable to one another at 46.1% and 46% respectively, according to the National Hospice & Palliative Care Organization. They fall just shy of the national average of slightly more than 50%.
Pennant Group has built up its hospice presence through both acquisitions and de novios during 2020. Between May and October, the company purchased three affiliated hospices for undisclosed amounts, through the Cornerstone subsidiary.
Pennant Group completed the first two transactions in May with the purchase of Prime Hospice, located near Phoenix, and Harmony Hospice of Arizona in the northwestern region of that state. In October, the company bought Harmony Hospice in Las Vegas.
Walker confirmed that Pennant will stay on the lookout for more hospice deals. More de novos such as those in California and Washington may also be on the way.
“We have recruited exceptional teams of clinicians and staff to provide outstanding care to the patients and families in these areas,” Brent Guerisoli, president of Cornerstone Healthcare said. “As we develop talented local leaders and are joined by leaders from outside our organization attracted by the unique opportunity offered by our cluster-centered operating model, we will continue to identify other potential opportunities for de novo growth and work diligently to establish operations in those areas.”