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Hospice NewsAmedisys Expecting Strong Growth in Chronic Illness Care | #hospice | #elderly | #seniors

Amedisys Expecting Strong Growth in Chronic Illness Care | #hospice | #elderly | #seniors

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Amedisys Inc. (NASDAQ: AMED) foresees strong growth moving forward, fed by demographic tailwinds and a greater shift of health care towards the home, which has been accelerated by COVID-19. A key strategy for the company as more chronically ill seniors age into Medicare is the build up of ancillary services such as personal care and palliative care in addition to their core home health and hospice business.

About 10,000 people in the United States become Medicare eligible every day, a trend that began in 2011 and is expected to last through 2030, according to the Medicare Payment Advisory Commission. Close to 80% of older adults have at least one chronic disease and 77% have at least two, according to the National Council on Aging. Chronic disease accounts for approximately 75% of U.S. health care expenditures.

To support this surging chronically ill population, Amedisys is building up a suite of services to allow for more longitudinal relationships with patients and families. Hospice providers seeking to provide care further upstream promises to be a major industry trend for 2021. 

“The world is constantly changing, and we are focusing on innovations, particularly [skilled nursing facility care] in the home, telemedicine, palliative care and our personal care network,” Amedisys President and CEO Paul Kusserow said the J.P. Morgan Annual Healthcare Conference. “The world is moving very much to these areas, and we’re anticipating building out these programs so that we can continue to differentiate ourselves and continue to lead in the industry.”

Amedisys currently operates 12 sites providing palliative care, with plans to add an additional two locations in 2021 and continued future growth. The company’s acquisition of AseraCare Hospice last summer for $235 million contributed to further expansion into the hospice and palliative care sectors.

Currently hospices provide about 50% of community-based palliative care in the United States, according to the Center to Advance Palliative Care. Palliative care has grown prominently in the hospice space with many providers launching that service line as a strategy for success in value-based programs and to build new revenue streams.

“This incredible demographic push is starting to move at an accelerated rate. We do believe that this significant growth in this area for the next 7-to-10 years is going to be a significant wind at our back and will drive significant utilization in these areas,” Kusserow said. “The best place to take care of chronic people that live with [a condition] for 10-to-15 years is in the home.”

Even as the company seeks to further develop its palliative care, personal care and other business lines, Amedisys will not shy away from growing its core services, including through acquisitions.

The company completed several hospice acquisitions during 2020, including AseraCare. Amedisys pivoted towards hospice deals in 2020 as it monitored disruption in the home health space stemming from the newly implemented Patient-Driven Groupings Model payment system. In 2021, the provider will be resuming activity in the home health M&A market while continuing to pursue hospice targets. 

Kusserow indicated that Amedisys was prepared to spend in the area of $300-350 million on acquisitions this year. He did not differentiate how much of that amount was earmarked for hospice transactions but was clear that high multiples in the hospice space would not be a deterrent for the time being.

“Hospice will be increasingly consolidating. The prices on hospice are getting higher. We’ve still been able to maintain prices of below 10x, but we have some private equity and other public competitors that are paying prices up above 20x,” Kusserow explained. “Our hope is that we’ll still be able to keep playing in that market and work proactively, particularly with regional deals.”

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