Aveanna Health plans to become a bigger player in home health, with its first deal in more than three years targeted for the first half of 2025, CEO Jeff Shaner said.
The company has not made any home health deals since December 2021 when it paid $345 million to acquire Comfort Care Home Health, a home health and hospice provider in Alabama and Tennessee. Shaner said navigating Aveanna through the COVID-19 pandemic and the nurse staffing shortage over the past few years was more of a priority than making deals.
Related: Home health, home care companies gear up for acquisitions in 2025
The Atlanta-based company derives about three-qurters of its revenue from private duty nursing services and the rest from home health, hospice and medical supplies. But Shaner said home helath needs to become a core driver for the company’s long-term growth.
Aveanna operates in 33 states, with home health services concentrated mostly in 15 states in the Midwest, Southeast and Mid-Atlantic regions. This interview has been edited for length and clarity.
Where are you looking to grow the home health business?
We are going to try to build out the Southeast, Mid-America and Mid-Atlantic [regions]. We have found that being highly fragmented is not the best way to think of the business. We would like to take our home health and hospice operations from 15 states to about 20 — not 50. That is not Aveanna. That is not who we are.
We have been out in the market in Q3 and Q4 actively looking for targets that fit us. It has to be the right culture and it has to be a clinically focused company. Those are two things that we can’t fix in a company that we acquire. We would like to close a couple of transactions in 2025 and then continue to ramp up from there.
Is the Justice Department’s lawsuit to stop the UnitedHealth-Amedisys deal a concern?
We will most likely be under the [market concentration] threshold and we would prefer to stay under that for business purposes. We support the Amedisys-UnitedHealth deal. We don’t think it’s bad for competition. We don’t think it’s bad for the industry. [The home health industry] is still incredibly fragmented and competitive. There are over 7,000 other [home health] agencies in America. There is still plenty of business for us as competitors. We are prepared to compete with that combined entity when it’s done.
Is home health a risky bet given the lower Medicare reimbursements?
One of the things we are excited about, with the new administration and a Republican-led Senate and House, is we feel there is an opportunity to get a permanent home health fix that will lead to more stability in the industry. With more stability comes more investment and more innovation. I think what is clear from the last Trump administration is that [the new administration] will want cost-effective care. They want a Medicare program that is cost effective. Home health is still at the core of the ecosystem of geriatric healthcare. The home health benefit is key to everything else, whether it’s physicians, hospital systems, hospice, acute care or outpatient services. For all of that to work, home health has to be vibrant.
Long-term, we need home health to be a core driver of growth and to do that we need to partner with the new administration. We hope the new administration will take a refreshed look at fixing the problem. Will it get done? We’re hopeful.
Has the reimbursement landscape been a drag on acquisitions?
With the exception of the United-Amedisys deal, it’s been a very quiet two years for [mergers and acquisitions] in home health. I think as the home health benefit starts to get better defined, M&A will pick up and I think we will see a more robust market, especially as the interest rates come down. It’s been very difficult to borrow money. I think we will see more companies that have been ready to sell will come to market with those two things playing out. I think as the new administration takes over and there is maybe hope for a less aggressive approach to block deals at the Federal Trade Commision threshold, people will take those deals to the FTC with the intent that it will be a thoughtful, open conversation about what is best for the consumer and the patient.
