LHC Group
Home health and hospice care services provider.
PE-OWNED
Acquired by TPG Capital2022-02-17
What Made It Great
Home-based healthcare services with hospice and therapy offerings
What PE Will Likely Do
Staffing cuts leading to fewer registered nurses and more licensed practical nurses or nursing aides providing home healthcare services
Potential sale-leaseback of LHC Group's real estate assets, extracting equity for investors but increasing costs that may be passed on to patients
Aggressive billing practices to code for higher-reimbursement procedures and diagnoses, leading to potential upcoding and higher costs for patients
Elimination of certain unprofitable but essential services like rural or psychiatric home healthcare, reducing access to these critical services for patients
Significant management fees charged by TPG Capital, diverting resources away from direct patient care
Expected Timeline
“0 to 6 months months”
Cosmetic changes, 'optimization' announcements, and leadership shuffle at LHC Group
“6 to 12 months months”
Staffing cuts begin under 'efficiency' programs, service line reviews start
“12 to 24 months months”
Care quality noticeably declines, with longer wait times for home healthcare visits and reduced services
“24 to 36 months months”
Major issues emerge, such as closure of certain home healthcare locations or quality scandals
“36+ months months”
Potential bankruptcy, sale, or significant restructuring of LHC Group
Similar Cases
Other companies that followed a similar path after PE acquisition
What You Can Do
Actions
Monitor for any changes in the quality or availability of home healthcare services provided by LHC Group, such as shorter visit times, reduced nursing staff, or the elimination of certain services
Be vigilant for any increases in the costs of LHC Group's home healthcare services, as the company may seek to pass on the costs of real estate sale-leasebacks or management fees
Consider alternative home healthcare providers if the quality or accessibility of LHC Group's services deteriorates significantly
Advocate for regulatory oversight and consumer protections to ensure that private equity acquisitions in the healthcare industry do not compromise patient care
Alternatives
Community-focused healthcare
Integrated managed care consortium