Image by Hieu Vu Minh

Reports

  • Healthcare Team

Merger between AccentCare and Seasons Hospice & Palliative Care

By: Louis Matovu, Anusha Patel, Ivar Johann Lassesen, Josh Shah


Deal overview


●Steve Rodgers (currently AccentCare CEO) will serve as CEO of the combined

organization.

● AccentCare’s hospice services will merge with Seasons, and the hospice operations will

be led by Todd Stern (Current CEO of Seasons).

● Stern will also serve as Executive Vice Chair of the combined organization, infusing

Seasons’ hospice experience and culture throughout the new organization.

Company Details: Accentcare


AccentCare is a leading post-acute health care service provider. This involves health

management services, hospices, home health, medical home care, and personal care services.They operate in 180+ locations, in 17 US states. They offer services to over 145,000 patients per year.


Founded in 24/03/1999

Headquarters: Dallas, TX, United States

CEO: Steve Rodgers

Number of employees: 25,000+



Company Details: Seasons Hospice & Palliative Care


A “community based organisation with an ongoing vision to find creative solutions

that adds quality to end-of-life care.” They are one of the largest hospice providers in the US.


Founded in 1997,

Headquarters: Naperville, IL, United States

CEO: Todd Stern

Number of employees: --


Short-term consequences


With a vision of simplifying and streamlining processes across the entire spectrum of post-acute care, AccentCare’s leadership in home health and personal care services will strongly

complement Seasons Hospice’s vast expertise in hospice and palliative care. The merger will be a key driver for transformation within the post-acute care market, allowing the combined entity to increase their geographical footprint, with the Accent-Seasons enterprise expected to become the fourth-largest hospice provider in the US. Apart from expanding and deepening their presence in the home health space, the merger will enable the companies to access a larger pool of resources in order to enhance product and service offerings across these various markets. One such example would be the ability to leverage on various joint ventures, as both AccentCare and Seasons Hospice have a plethora of strategic partnerships with other healthcare providers.


Upon completion of the deal, the combined organisation will operate over 225 sites of care across 26 states, with over 60 health systems and physician practice joint ventures and strategic partnerships providing care to more than 175,000 patients and their families each year. Although financial terms are being kept confidential, both AccentCare and Seasons Hospice have enjoyed healthy profit margins above other segments of the healthcare space despite the pandemic. Given the strong synergies between the companies in terms of geographic footprint and expertise, it is likely these margins will see further improvement upon successful integration of the two organisations.


Long-term upsides


The horizontal integration of the combined entity will expand their access to new communities in the long-term making it easier for patients to get the personalized home health, personal care services, skilled nursing, or hospice they need. “With these two organizations together, we have a rare opportunity to shape the future of skilled home-based care,” said Steve Rodgers, CEO of AccentCare. “The new organization will bring together the expertise and vision needed to rethink patient-centered care in the home, and offer innovative solutions to the health systems and physician groups we serve.” Another potential long term upside of the merger is the increase in innovation which can enable greater efficiency.


The U.S. hospice market size is expected to reach USD 63.7 billion by 2026. Growing demand for remote patient monitoring coupled with technological advancements such as tele hospice are anticipated to drive the U.S. hospice market in the near future. Videoconferences can help physicians to offer optimal support and advice to caregivers or patients doubtful for treatment in emergency cases. Both AccentCare and Seasons plan to invest in technologies and resources that will help uphold their relationship with patients and improve the quality of care they offer which in turn may help drive revenue growth in the long term.



Risks and uncertainties


Risk 1: AccentureCare is a portfolio company of PE firm Advent International, therefore by their nature, post merger, will still try to increase efficiency. In today’s Covid climate this could massively backfire where cost-cutting on staff and safety regulations could cause

covid-outbreaks in such care-homes; worsening the stigma that care homes/ healthcare have

become vehicles for wealthy investors. However AccentCare’s CEO Steve Rodgers will lead the combined entity post merger. He is a progressive figure and has taken the pandemic extremely seriously- noting “We may not be able to fulfill their physical wish (of a hug), but let’s make sure they feel cared for. And we can give them a bit of peace and hope”. Therefore it is clear that there is a stronger outlook for a more prudent, and health-conscious approach and he will still hold a lot of decision making power despite the private equity input.


Risk 2: The business model could be viewed as too reliant on face-to-face services. Despite a

clear interest in investing in technology to innovate better and more effective solutions to

personal care, the very nature of the job, and the clients they work with, means that in the

short-term this way of operating is somewhat unavoidable. The implication this has is a large

increase in operating expenses until it is safe to work without such stringent regulations (i.e when there is a vaccine that is widely used) or until they devise technology which makes work more productive. Both of these solutions do not seem to be on the horizon. As more workers are on ‘furlough’ through the CARES act, healthcare workers use large amounts of PPE, and workers take more care during work; this all drives up total costs which is never a good sign post-merger when economies of scale are meant to kick in. ‘Also included in the merger is Health Resources Solutions, a home health provider serving 2,500 patients in three states, as well as the personal care business Gareda, with more than 4,500 yearly clients’. With more companies involved in the merger, this could lead to a potential clash of objectives and workforce rationing- the degree of this depends on how firm Steve Rodgers is- as we are to find out soon.




19 views0 comments