Gentiva Health Services Acquisition Will Shake Up Several Industries says Analysts
By admin on Jun 15, 2010 in Featured, In the News, Long Term Care, Long Term Care Insurance, Medicare, Medicaid and LTC
Last week’s $1 billion purchase of Odyssey Healthcare (ODSY) by Gentiva Health Services (GTIV) is going to shake up several industries according to Investors Business Daily.
Gentiva provides in-home care for patients, most of whom are elderly. Odyssey provides hospice care for those in their last days.
The merger suggests convergence and consolidation across the wide spectrum of care for aging Americans. The spectrum includes home health care, assisted living, long-term health care, nursing home care and hospice, says Bill Buhr, an analyst with rating firm Morningstar.
The Gentiva acquisition of Odyssey, pulling two of those elements into one organization, is “a transaction that can overnight change other industry player strategies,” he said.
Sophia Snyder, an analyst with market research firm IBISWorld, agrees. The Gentiva-Odyssey deal is an important diversification for a provider of home health care, she says.
It’s a wise strategy as Medicare and Medicaid restrain and even reduce payments to providers of health services. Most patients with in-home care, long-term care, nursing homes and hospice are under the umbrellas of Medicare and Medicaid.
Improvements in coverage won’t kick in until 2014, she notes. “By merging with other providers, industry operators are able to spread costs, such as administration, marketing and purchases, over more locations.”
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