Bayada Home Health Care transitions to not-for-profit with new CEO

Bayada Home Health Care has named a new CEO to help it transition from a privately held company to not-for-profit agency. David Baiada will replace his father and former Bayada CEO Mark Baiada, the company announced Thursday.

The Moorestown, N.J.-based agency described the move as the first of its kind in the home health care industry, driven by a motivation to sustain the organization for multiple generations and bolster recruiting and retention efforts, David Baiada said.

"It is about creating an institution that lasts multiple generations so the business can't be sold and the culture building on the value of its long-term orientation is preserved," he said.

Bayada will systematically donate portions of the company to the new not-for-profit entity over a period of up to two years. Each patient needs to be discharged, admitted to the new organization and all regulations and licenses will be adjusted during that period. Mark Baiada is the sole owner of Bayada and will not receive anything for the transition, the company said.

Since Mark Baiada founded the company 42 years ago, he has helped grow the organization to more than $1.2 billion in annual revenue. Bayada has more than 26,000 employees who care for nearly 30,000 clients a week across more than 335 locations in five countries. Selling all or part of the company would "disembowel its mission," said Mark Baiada, who will take on the chairman role.

"The purity of our purpose will help us with recruiting employees who can get behind our mission," he said.

The tax exemptions Bayada will receive as a not-for-profit was a byproduct of the transition, not a driver, Mark Baiada added.

The transition was announced amid a time of significant change in the home health industry. Many health systems are shedding their home health businesses and forming joint ventures with national for-profit operators. While home care provides a lower-cost delivery setting that patients often prefer, it nets lower margins than health systems' hospital and outpatient operations.

Catholic-sponsored Christus Health of Irving, Texas, formed a joint venture in early August with LHC Group, which will manage its 21 home health, hospice and long-term hospitals. In June, Dallas-based Baylor, Scott & White of Dallas offloaded its home health segment into a joint venture with AccentCare. Tenet Healthcare sold its home health and hospice business to Amedisys, yielding significant financial gains, the system said in its second-quarter earnings.

Twenty years ago, there was a rush to own post-acute segments including home health, but systems today often opt to affiliate or partner, similar to the trend with physician groups, said Sloan Clardy, chief strategy officer for nThrive, which provides revenue-cycle management.

"Systems are evaluating their post-acute models that can drive profitability and volume and determining what the best strategy is," he said.

As the population ages, home health is projected to be one of the fastest growing job sectors, estimated to increase from 1.26 million workers in 2014 to more than 2 million in 2024, according to the Bureau of Labor Statistics. Despite increasing demand, there is a shortage of qualified home care providers that has handcuffed the industry.

Coordinating post-acute and home healthcare will also be a focal point for many organizations as they look to wade deeper into new payment models that emphasize reducing unnecessary care, lower-cost care delivery settings, patient satisfaction and better outcomes realized through population health initiatives.

The low-cost, patient-preferred care setting coupled with the aging population point to the home as the place to deliver care, David Baiada said.

"There is not a single health system we've interacted with that isn't thinking strategically how to extend care delivery into the community, either through services they provide themselves or through deep alignment with home health providers like us," he said.