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LHC Group (LHCG) & SCP Health to Offer Home Health Services

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LHC Group, Inc. (LHCG - Free Report) recently formed a strategic partnership with SCP Health concerning the joint development and delivery of advanced clinical care services at home. The partnership will provide a comprehensive offering of in-home healthcare services, including skilled nursing facility (SNF)-at-home and hospital-at-home programs, to existing and new hospital and health system partners in order to meet the increasing demand for value-based care models and at-home care solutions.

The LHC Group-SCP Health collaboration is expected to benefit patients, hospitals and health systems, and payors alike given the ability to treat higher acuity patients in a cost-effective setting, that is, in patients’ residence. A premium will be placed on companies with quick risk-taking capacity and ability to deliver proven value on a national scale, in an effort to expand Centers for Medicare and Medicaid Services' value-based purchasing program nationwide.

The recent partnership is stated to advance LHC Group’s existing SNF-at-home model and to permit its Home Care Innovations segment to drive the ongoing transition to value-based care, thereby leveraging the company’s ability to offer high acuity care at home to better execute value-based programs in support of hospital partners and payors.

More About the Collaboration

The partnership will facilitate the development of innovative, clinician-led, proprietary model to elevate in-home care by utilizing the combined talent and expertise of SCP Health and LHC Group.

Zacks Investment Research

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At present, SCP Health and LHC Group are set to start engaging with their hospital partners and clients to launch new shared clinical models in all appropriate settings of care. Notably, both LHC Group and SCP Health have a nation-wide presence, with the former having equity joint ventures representing 435 hospitals across the country and with the latter operating in more than 30 states. LHC Group is either a joint venture partner or operates a home health agency in 179 hospitals where SCP Health deploys emergency department physicians and hospitalists.

Industry Prospects

Per a report published in MarketandMarkets, the global home healthcare market size is set to witness a CAGR of 8.6% by 2025. Factors such as rapid surge in the elderly population, rising incidence of chronic diseases, growing need for cost-effective healthcare delivery and technological advancements of home care devices are expected to drive market growth.

Given the substantial market prospects, LHC Group’s recent partnership to provide health services at home seems strategic and well-timed.

Notable Developments

In July 2021, LHC Group announced agreements to purchase three home health, hospice, and palliative care providers across three states, including Cavalier Healthcare Services in Virginia, MSA Hospice in Indiana and Ashley County Medical Center Home Health in Arkansas. At the same time, the company announced the closure on previously-announced purchases across the states of Idaho, Oregon, Arizona, and Texas.

In June 2021, the company entered into a definitive agreement to purchase Heart of Hospice from EPI Group, LLC, based in Charleston, SC. This buyout includes 16 hospice agencies in Arkansas, Louisiana, Mississippi, Oklahoma and South Carolina. It is intended to expand the company's hospice footprint across the five states.

In May 2021, LHC Group announced plans to acquire Heart 'n Home Hospice to enter the hospice services market in the state of Oregon and expand its existing hospice footprint in Idaho. The acquisition involves three hospice providers in six locations across southwestern Idaho and four locations across central and eastern Oregon.

Share Price Performance

LHC Group has outperformed its industry over the past year. The stock has rallied 20.3% against the industry’s 5% growth.

Zacks Rank and Other Key Picks

Currently, LHC Group carries a Zacks Rank #2 (Buy).

A few other top-ranked stocks from the Medical-Services industry include Apollo Medical Holdings, Inc. (AMEH - Free Report) , AMN Healthcare Services Inc (AMN - Free Report) and ICON PLC (ICLR - Free Report) , each sporting a Zacks Rank #1 (Strong Buy).

Apollo Medical has a long-term earnings growth rate of 20%. You can see the complete list of today’s Zacks #1 Rank stocks here.

AMN Healthcare has a long-term earnings growth rate of 6.5%.

ICON has a long-term earnings growth rate of 11.7%.