Enhabit Home Health and Hospice (NYSE: EHAB) has acquired Texas-based Caring Hearts Hospice for an undisclosed amount, adding four locations to the company’s footprint in the state.
Enhabit emerged from the spinoff of Encompass Health’s (NYSE: EHC) home health and hospice segment, which completed in July. The company is pushing to grow right out of the gate, with a series of potential acquisitions in its pipeline and a goal of opening 10 de novos annually.
“We are thrilled to continue to grow Enhabit’s hospice service line and maintain our goal of supporting patients throughout their health care journey, in the comfort of home,” Jeanne Kalvaitis, executive vice president of hospice at Enhabit, told Hospice News. “The acquisition of Caring Hearts Hospice enables Enhabit to reach even more patients and families in need of high-quality, compassionate care. We continue to have a strong focus on our expansion efforts and look forward to all that lies ahead.”
Enhabit employs about 10,000 workers and operates close to 350 locations in 34 states. About 95 of those locations are hospices, seeing about 13,200 patients annually. The company expects to earn nearly $1.08 billion to $1.12 billion this year, with an adjusted EBITDA of $197 million, according to a previous Encompass Health earnings call.
Overall revenue reached $268 million in the second quarter, a 6.3% dip compared to the same period last year — when the provider was still the home health and hospice segment at Encompass. Its hospice business brought in $47.8 million during Q2, an 11.2% drop from the prior year.
The company plans to spend between $50 million and $100 million annually on acquisitions across all of its business lines, according to Enhabit CEO Barbara Jacobsmeyer.
“It’s going to be a combination between home health and hospice,” Jacobsmeyer recently told Hospice News. “Right now, [the acquisition pipeline] is more heavily weighted to hospice because we do see value in adding hospice where we currently have home health. So there’s a focus for that for us. But again, the development pipeline is also pretty robust. So between acquisitions and de novos, we see ourselves continuing to grow Enhabit’s hospice service line.”
Seniors are driving up demand for home-based care in the Lone Star State. This age group is projected to make up more than 20% of the state’s population by 2030, a rise from 12.9% currently.
Hospice utilization among Medicare decedents in Texas runs high, reaching 52.1% in 2018, tipping above the national average of 50.3% that year, according to the National Hospice and Palliative Care Organization.