M&A Activity in Post-Acute Care
Author: Shea Swenson
Posted: June 4, 2024
The post-acute care sector's merger and acquisition (M&A) landscape is continually evolving due to industry expansions, regulatory changes, and technological advancements. In recent years, M&A activity has experienced significant fluctuations influenced by economic stability, regulatory shifts, and changes in clinician behavior, including recruitment and retention challenges. Home health and hospice agencies must quickly adapt as they navigate these shifts, often diverting focus from quality care and overall compliance. However, with economic recovery, favorable regulatory changes, and reduced buyer apprehension, M&A activity is anticipated to rise. This resurgence will emphasize quality standards and thorough due diligence to ensure transaction success. As workforce challenges become increasingly prominent in M&A discussions, buyers and sellers must align their expectations regarding quality, due diligence, and workforce standards. At MHA, our experts are ready to guide agencies through all phases of the M&A process, offering clinical, operational, financial, and technological expertise.
Looking Ahead at M&A Considerations
In recent years, substantial changes have occurred in M&A activity within the post-acute care industry. With pandemic-related challenges subsiding and new regulations and advancements emerging, agencies must stay ahead of the turmoil to maintain a focus on quality care. Three key factors influencing the rise in M&A activity are:
- Medicare Advantage Expansion
The demographic shift and growing aging population have increased Medicare Advantage (MA) enrollment. In 2023, over 30.8 million beneficiaries enrolled in MA, accounting for 51% of all eligible for Medicare population.1 M&A transactions are poised to grow to meet this increased demand, as MA plans offer more comprehensive care management, greater financial reimbursement, and an emphasis on value-based care and quality patient outcomes.
- Integration of AI
As AI becomes more prevalent, post-acute organizations are adopting these solutions as an essential tool to navigate industry challenges and remain viable. Predictive analytics and AI tools enable agencies to provide high-quality care, reduce costs, eliminate errors, and refocus strategies on patient care. Leveraging AI will help identify gaps and ensure the strategic integration of agency processes, particularly during M&A transactions.
- Anticipated Regulations
Regulatory changes from the anticipated FY2025 rule may present challenges during M&A activity. With increasing payment rates and the implementation of new care assessment procedures, streamlined practices and consultation are essential during transitional periods. MHA guides agencies through these changes with tech-enabled solutions and strategic consulting.
MHA Expertise and Services
As home health and hospice agencies face challenging times, MHA provides hands-on assistance, allowing agencies to focus on delivering quality care. Our experts offer in-depth consultations with backgrounds in home health and hospice care, encompassing EMRs, operations, billing, and clinical understanding. Our services include:
1. Comprehensive Assessments
Our team identifies operational gaps in agency operations and enhances training and integration due diligence standards. We provide clinical, financial, regulatory, and operational support to ensure compliance with strict post-acute care regulations.
2. Strategic Consulting
MHA's strategic consulting services define focus areas and prepare agencies for mergers. Our tailored approach highlights strengths and identifies gaps, offering recommendations for growth and success during transactions.
3. Integration Planning
Our industry-leading experts develop successful integration plans for post-acute care transactions, ensuring smooth and successful post-merger alignment. We create data-driven strategies that support seamless integration across all areas of interest.
4. Full Support
We provide comprehensive support throughout the M&A process, from strategy development to transaction execution. MHA ensures productivity and success and is backed by data-driven results.
Throughout our end-to-end assistance, we cover all bases, ensuring clarity and alignment remain top of mind, ultimately creating a streamlined experience poised for continual growth and employee buy-in.
The MHA Difference – Strategic M&A Guidance
M&A activity in the post-acute care environment can be challenging, with agencies balancing pre-existing obstacles alongside regulatory changes and technological advancements. As the future of post-acute M&A activity is expected to increase due to aging population demands, the rise of AI, and regulatory changes, MHA's leading experts are prepared to provide the best guidance and consulting for buyers and sellers. Parties looking to invest, buy, or sell in the industry must ensure a partnership with experts who prioritize optimal, informed acquisition decisions. Our team, with real hands-on experience in home health and hospice environments, offers comprehensive assessments, strategic consulting, and integrated planning, making MHA a one-stop shop for efficient transactions. If you’d like to learn more about our strategic M&A solutions or our expertise in driving growth, contact us at [email protected] or visit www.maxwellhca.com. Or tune in to our latest M&A webinar.
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