The Dare County Board of Commissioners in North Carolina has approved the sale of its local home health and hospice agency to BrightSpring Health Services for $2.9 million. The deal is contingent upon BrightSpring maintaining services throughout the Dare County agency’s current service region and retaining its employees.
The county began a bidding process late last year after determining that operating the agency themselves was no longer financially sustainable. They also cited a lack of sufficient staff to meet growing demand for hospice in their region, County Manager Robert Outten told Hospice News. The county board approved the sale agreement in a six-to-zero vote.
“I do believe the number one priority for me, and the decision I have to make, has got to be made for the citizens of Dare County,” Commissioner Ervin Bateman said in a public hearing. “If we don’t make the decision to do this, according to what people have told me, and I’ve talked with [the county’s Health and Human Services Director Sheila Davies] at length, this thing might implode, and we can’t handle it ourselves.”
Four potential buyers bid on the acquisition, but three were unable to confirm that they would retain all current staff with their existing employment benefits. Bids ranged from approximately $200,000 to the $2.9 million offered by BrightSpring, according to Outtman.
Louisville, Ky.-based BrightSpring is a portfolio company of the global investment and private equity firm KKR & Co., which purchased the company in 2018 for approximately $1.32 billion.
BrightSpring recently acquired hospice provider Abode Healthcare from Summit Partners with a reported valuation of $775 million, PE Hub reported. That transaction is projected to bring the combined company roughly $6 billion in annual revenue.
Approximately 80% of BrightSpring’s services are provided in the home, primarily serving senior patients and those with behavioral health care needs. The company has been expanding into various specialized health care markets.
Hospice utilization in North Carolina reached 49.2% in 2018, according to the National Hospice & Palliative Care Organization. This is just shy of that year’s national average of 50.3%
Dare County Home Health & Hospice has been no stranger to the staffing shortages plaguing the industry, which proved to be a key factor in the decision to sell. More than 35% of hospice leaders surveyed by Hospice News earlier this year cited staffing shortages as a top concern for their organizations, along with regaining access to patients in facilities.
Many hospice providers have seen staff turnover rise during the pandemic, as have organizations in other health care settings. Slightly more than 20% of health care workers have considered leaving the field due to stress brought on by the pandemic, and 30% have considered reducing their hours, according to a recent study published in JAMA Network Open.
“We have a difficult time getting qualified staff, and the need for hospice care has grown as well,” Outten said. “To sustain it would require a big injection of money to change salaries, and even then we have no assurances that we can get the staff that we need. Our patient counts are declining because we didn’t have enough staff.”
Per the agreement, BrightSpring must retain the home health and hospice asset for three years before divesting it, should the company decide to eventually sell. Employees will also receive a sign-on bonus for remaining with the agency post-acquisition.
Neither party has signed a contract at this point, but the deal is almost certain to go forward pending some logistical work, Outten said. BrightSpring had no comment to Hospice News on the impending purchase.
Some members of the community as well as the agency’s staff have publicly expressed reservations about transitioning from a government department to a for-profit company. County commissioners indicated in a public meeting that they believed they had exercised due diligence regarding BrightSpring’s quality of care metrics, their commitment to maintaining current levels of service and the future of employees.
“The status quo that we have in the county is not acceptable. We have too many people without services. The 95 or 96 North Carolina counties that have done this cannot all be wrong,” said Commission Vice-Chairman Wally Overman in the hearing. “I think [the sale] is the right thing to do.”
Companies featured in this article:
BrightSpring Health Services, Dare County Home Health & Hospice
