July 20, 2022 – The demand for home care is growing, sparking a wave of consolidation by private equity firms, payers and big health systems. It’s a busy and challenging environment for local providers of home-based medical services as well as their suppliers.
“The pressure being applied by higher costs, difficulty finding qualified people, and stagnant reimbursement has resulted in many [providers of home-based medical care] looking for a way to survive or get out with minimal losses,” says Jay Butler, vice president of extended care, IMCO. “Integrated health systems can navigate the difficult market and realize savings that standalone providers simply can’t.
“I believe venture capitalists are looking to capitalize on the market disruption by acquiring providers at desperation prices with intention to spin them off for a quick profit. They’re very good at what they do. However, I question if this is in any way good for the patients or business overall. Many times, the focus on the bottom-line forces decisions to lower product quality, and the patient pays the price.”