Are Hospice Mergers and Acquisitions Continuing to Rise?

Covid has impacted many industries and as a major health concern, many people are wondering what that means for hospice mergers and acquisitions. With past lockdowns and some families still worried about spreading covid to their most vulnerable family members, what’s the word on hospice merger?

Are Hospice Mergers and Acquisitions Continuing to Rise?

At the beginning of covid, hospice mergers and acquisitions saw a sharp decline. There were many small and medium agencies that were set to open but never did. The agencies that were open were forced to redirect their attention to the health crisis when covid finally did hit the United States, further impacting the numbers for 2020.

2020 saw 75 deals, but only 27 of these were related to home healthcare. In 2019 and 2018, there were 79 and 99 by the third quarter respectively. By the end of 2021, the quarterly numbers for hospice mergers and acquisitions still hadn’t quite reached the same as before the pandemic, but there is hope.

There has been a turn back to hospice that looks promising for 2022. New deals are springing up and medicare reimbursements are encouraging people to turn back to the familiar landscape of hospice care.

Even though the pandemic continued throughout 2021, there was an increase in home care demand as compared to during 2020. Families stopped being so afraid of the virus and instead, turned to provide comfort and care for their loved ones through hospice.

Factors Affecting Hospice Mergers and Acquisitions

As Biden pushes to increase capital gains tax up to 43.4%, many providers were eager to close deals in 2021. Another reason many providers decided to sell was due to short staffing, high costs, and much shorter lengths of stay.

For smaller agencies, the pandemic was too much and they were forced to close their doors or sell. In many of these cases, owners were already considering selling in the future. The pandemic was simply an accelerating factor in doing so.

It’s true that hospice dominated the spotlight before the pandemic and while the numbers have dropped since 2020, hospice isn’t expected to disappear altogether. Many agencies are already working towards more mergers and acquisitions as interest rises again and families become more eager to return to normal. Home health and hospice included.

Even with the ongoing pandemic, families are looking for the most comfortable and the best end-of-life care possible. Despite the fewer numbers and limited healthcare professionals available, hospice is still favored around the country. Already, professionals are looking at the dip in numbers as a short-term problem for hospice centers.

How Hospice Centers Survived the Pandemic?

Hospice centers that survived the most challenging months of the pandemic all seemed to share similar practices and reports. The centers that were able to stay in business and continue offering care quickly and efficiently incorporated telemedicare practices into their care routines.

With the inability to have specialists and practitioners visit hospice centers as needed, the remaining homes were forced to take steps toward telehealth and telemedicine.

Costs went up and profits went down, but the hospice centers that wished to sell or remain in business all kept thorough documentation of their expenses and how they handled staff shortages. There is also documentation regarding the agencies’ performance. Much of the time, this documentation is more thorough than the years before the pandemic.

For hospice centers that are or were looking to sell, documentation was kept more thoroughly than ever before, resulting in a much clearer understanding of the daily running and expenses of the centers that remained open. The most promising hospice centers were able to demonstrate sustainability both in practice and in documentation.

Conclusion

While the number of hospice mergers and acquisitions was impacted negatively by the pandemic in 2020, there is hope for 2022. Already, there is a promising outlook and no reason for professionals to worry that hospice care centers will become far and few between.