Suddenly, pediatric home care mergers and acquisitions is Where the Wild Things Are.
The rumpus first broke when Bain Capital (yeah, that Bain, and perhaps bane of Mitt Romney) announced that it was acquiring Epic Health Services for a cool (just under) billion dollars.
Just a month later, the Epic deal became positively epic when Bain trotted out that it was acquiring PSA Healthcare as well and merging the two KidCos together.
So why is pediatric home care suddenly the new black?
Autism services have garnered a lot of newfound attention, but neither company has a particularly large presence in this segment. There have been no new regulatory or reimbursement initiatives that portend dramatic increases in utilization. In fact, one could argue that pediatrics may be under pressure with a rollback of the Affordable Care Act and talks of reinstating Medicaid block grants.
We believe the answer lies in an alternative model for home care that The Braff Group first floated in July of 2016.
At its core is our belief that home care has been dis-integrated into Medicare home health, hospice, private pay, and Medicaid (pediatric and adult), not because of any unsurmountable challenges to efficacy or delivery, but rather due to idiosyncrasies in reimbursement and benefit design.
Take this out of the equation and you wouldn’t have this segmentation. You’d have home care providers offering a comprehensive array of acute and long-term services to adult and pediatric populations.
Now consider that with the emergence of coordinated care reimbursement initiatives such as accountable care organizations, bundled payments, population health management, et. al. that aim to treat patients whole-listically vs. payor-listically, the funding and formulary is in-place to lose the labels.
So perhaps it wasn’t just a throwaway synonym when Bain dropped the pediatric moniker and said of the Epic deal, “we have seen that home health care is mission critical to yielding better healthcare outcomes, and we are excited to work with [Epic] to extend the company’s comprehensive value proposition,” [emphasis added].
In the end, it’s not that pediatric home care is the new black.
It’s that buyers are fast realizing that this long-underappreciated sector can be an entry-point into a new vision for health care.
Yup, the Kids are Alright.