The successful completion of a joint venture partnership between LCS and CareSouth means more growth ahead for home health across LCS’s portfolio of communities.
This week, CareSouth completed its investment in the jointly-owned home health care business the companies have partnered on—a year earlier than initially anticipated.
The completion of the investment and the success of the partnership to date shows more potential growth for home care within LCS’s existing business as it currently serves about two dozen communities to the 127 communities LCS manages across the country—putting into action a practice that many senior living providers are trying to incorporate.
“This is a significant growth opportunity for our health at home business,” LCS CEO Ed Kenny tells SHN. “[Health at Home] is in 11 states and is servicing about 30 campuses. We have a portfolio of 127 communities and we see a great opportunity over the years ahead to penetrate this market.”
The partnership has taken on a slightly different structure from the way some senior living providers offer home care.
For nearly 20 years prior LCS itself was in the business of home care. Though annual sales of its home health business were around $30 million, there were notable challenges to the business such as IT infrastructure and management, regulatory and compliance issues, and scaling the business for success.
“We see home care as a very, very important part of the service continuum—both private pay and Medicare services,” Kenny said. “We also recognize home care is becoming a much more complicated business than it was in the early days.”
The company didn’t want to sell the business line, so instead it sought a specialized partner and agreed to a joint venture partnership in July 2013 with CareSouth, an existing home health care provider that now counts 60 locations and maintains a spot with the 12th largest marketshare among U.S. providers of Medicare certified home health. The company also offers private duty care, non-acute health services, hospice and other services.
Under the terms of the partnership, the business is jointly-owned, with CareSouth being responsible for the day-to-day operations. Under the original agreement, CareSouth would make a scaled investment in the shared business over three years. But after just two years, the company made its final investment early.
“Our first year with LCS and Health at Home has been a tremendous success,” said Rick Griffin, president and CEO of CareSouth, in a press release. “…We did not want to wait another year to make a total commitment to this partnership and to the residents of the LCS communities we serve.”
Written by Elizabeth Ecker