Between massive company losses, passage of a long-awaited healthcare and climate change bill and rumors that CVS may buy a major digital home care company, this was a week of highs and lows for the home care sector. Here is a brief rundown of who came out on top and who may be seeking brighter days ahead.
1. Signify Health
This week it came to light that the nontraditional digital home care company has one of the country’s biggest pharmacy chains as a suitor. That is not a bad place to be for a firm reportedly valued at $4.7 billion. CVS, like Walgreens, is looking to expand beyond pharmacy to health and wellness. Given the demographics and trends toward home, investing in home care is a pretty safe bet. And Signify certainly seems to be on the cutting edge, given its emphasis on data and strong ties to Medicare Advantage, the new, fast-growing Medicare program. CVS likely sees the future of healthcare in these areas. All in all, Signify seems to be the right company at the right time.
The Inflation Reduction Act, which the Senate passed on Sunday, obviously is a win for the Democrats. But it’s also positive for seniors. The bill for the first time would let the federal government negotiate prices of select prescription drugs and cap the amount older adults pay for some out-of-pocket medications. This can only be good for older Americans, many of whom spend a good portion of their fixed incomes on healthcare, including prescriptions. The bill, which would implement environmental controls, may also benefit this group, which suffers when the weather gets extreme.
The private duty, home health and hospice company suffered a staggering loss in the second quarter, the company said this week. Labor costs and inflation contributed significantly to their problems with their bottom line. But as CEO Tony Strange noted on an earnings call, this quarter likely is just a brief setback. Once the world and labor markets normalize, the home care company likely will, too.
2. Pennant Group
This company also did not have a stellar second quarter (or week, for that matter) for the same reasons as Aveanna. Still, its loss — $2.6 million — did not dim the transaction enthusiasm of its executives, who said they are eager to get back in the buying hunt for small- to medium- sized agencies.All in all, a big week for the industry.
I’d like to tip my hat to one more success story this week: Diversity, Equity and Inclusion. Whether or not you want to acknowledge this concept, companies that want to keep and retain employees should embrace it. Learn more about why it makes good business sense here and here.
Liza Berger is editor of McKnight’s Home Care. Email her at [email protected].