St. Croix Hospice, a portfolio company of the private equity firm H.I.G. Capital, has opened a de novo in Duluth, the second largest metropolitan area in the company’s home state of Minnesota.
Demographic tailwinds offer strong support for hospice businesses in Minnesota. Seniors aged 65 and older comprise 15% of the Minnesota population, according to the research group Minnesota Compass. That totals nearly 806,00 individuals, a number expected to rise above 1.3 million by 2040.
“The St. Croix Hospice Duluth office is a natural extension of our northern Minnesota teams and allows us to expand our services to more communities in the area,” said St. Croix CEO Heath Bartness. “Our expert clinical teams live in the communities they serve, which means they are readily available to provide consultations, admissions and care for local patients and families in the Duluth area.”
Minnesota ranked 12th in the nation in hospice utilization during 2018 with 52.7% of its Medicare decedents electing hospice, according to the National Hospice and Palliative Care Organization. Utah leads the nation in utilization with 59.4%. The national average is slightly higher than 50%.
St. Croix’s average daily census hit more than 2,200 patients during 2020 from 40 locations in seven states. H.I.G. Capital acquired St. Croix from PE firm the Vistria Group last year for an undisclosed amount in one of 2020’s largest private-equity backed hospice deals.
St. Croix opened seven de novos during 2020 and has completed several acquisitions.
The company considers symmetries between a potential new market and their existing operations when selecting acquisition targets or new locations. They also estimate the extent to which they can increase access to the hospice benefit and identify opportunities to establish relationships with new referral partners. The company plans to accelerate its de novo and acquisition activities during 2021, according to CFO Stephen Phenneger.
St. Croix moved into Illinois earlier this year with the purchase of Hospice Care of America. Financial terms of that transaction were not disclosed. In March 2020, St. Croix acquired Serenity Care Hospice in Missouri for an undisclosed amount and opened a new location in Iowa last month.