HCA Healthcare Inc. (NYSE: HCA) executives provided a brief update on the company’s home health and hospice operations Thursday.
It was the first time the Nashville, Tennessee-based hospital giant shared additional information about its post-acute care plans since finalizing its $400 million deal with Brookdale Senior Living Inc. (NYSE: BKD) in July.
“We’re in the early stages of integration,” CEO Sam Hazen said during HCA’s fourth-quarter earnings call. “We’re looking for some significant strides on that front in ‘22.”
To recap, HCA last year acquired an 80% stake in Brookdale Health Services, which housed the senior living company’s large home health and hospice businesses. At the time, Brookdale operated 57 home health agencies and 22 hospice agencies across 26 states, along with 84 outpatient-therapy locations.
For HCA, the transaction was a strategic move to complement its core operations with post-acute care capabilities.
The company’s overall network includes 183 hospitals and 2,000 ambulatory sites of care. On Wednesday, it announced plans to build five new full-service hospitals in Texas as well.
Brookdale, meanwhile, was looking for a way to strengthen its liquidity position while ensuring its residents still had access to the range of services they had grown accustomed to.
“We are pleased with this value-enhancing transaction and that high-quality health care services continue to be available to our residents,” Brookdale CEO Cindy Baier said in August. “Brookdale’s residents will benefit from a seamless offering of services across a broad care continuum.”
The home health and hospice industries had been following this deal closely, given the size and market share of Brookdale Health Services. Prior to Thursday’s call, HCA executives hadn’t really shared any new insights, however.
That’s partly because HCA’s No. 1 priority was initially evaluating where it made sense to maintain a home health and hospice foothold, according to Hazen.
“The first part of this year has been about integration,” he explained. “We sold non-overlap components to another home care company, and then we’ve been organizing ourselves around home care and hospice inside of the markets where we overlap.”
LHC Group Inc. (Nasdaq: LHCG) completed its acquisition of 23 home health locations, 11 hospice locations and 13 therapy locations from the HCA-Brookdale joint venture in November. Broadly, those assets were located in areas where HCA did not have an existing hospital presence.
“We had a very good feeling that there would be an opportunity coming to us,” LHC Group Chairman and CEO Keith Myers previously told Home Health Care News. “We know HCA well enough to know that if they don’t have a hospital in a market, then they’re probably not interested in those assets.”
With that reshuffling complete, HCA can now focus on the future of the Brookdale-HCA home health and hospice agencies.
HCA’s Q4 2021 revenue was about $15.1 billion, a more than 5% increase compared to $14.3 billion in the fourth quarter of 2020. Revenues for the year ended Dec. 31, 2021, totaled roughly $58.8 billion, up 14% compared to $51.5 billion the prior year.
Contextually, HCA’s financial results fell below investors’ expectations, largely because of the Omicron variant and related disruption across its service lines.
Recent surges have also made patient discharges much more difficult, Hazen noted.
“It has been more difficult … because the nursing home environment – and even the home care environment – has been suffering from employees who have been infected by the Omicron variant,” he said. “That has created a little bit of a contraction, we think, in some markets with overall post-acute capacity. And that has delayed our ability to execute on our discharge-planning process as we ordinarily would.”
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