Gentiva purchase of Odyssey would create largest U.S. home health and hospice provider

A plan from Gentiva Health Services to buy Odyssey HealthCare for almost $1 billion would create the largest U.S. provider of home health and hospice care, The Associated Press reports. "The boards of both companies have approved the acquisition, which is expected to close in the third quarter, pending approval by regulators and Odyssey stockholders. The companies said the deal will create a hospice care provider with an average daily patient census of about 14,000 and operations in 30 states. They anticipate the combination will create a company with more than $1.8 billion in annual revenue." Last week Gentiva acquired United Home Care Group, another such home care and hospice company (5/24).

The Wall Street Journal: "Jefferies & Co. analyst Arthur Henderson called Gentiva's acquisition of Odyssey 'a strategically sound move that will not only drive incremental growth for the company, but will also allow it to diversify its business while generating operations synergies.' Industry insiders for years have debated the merits of melding home nursing and hospice, with Gentiva a long-time proponent based on its view that the businesses can share referral sources, marketing staff and recruitment resources, Mr. Henderson said." Some analysts don't expect antitrust concerns "as the two companies' hospice businesses don't overlap much, [some analysts say]. … Gentiva is among the companies that recently received a letter from the Senate Finance Committee, which is questioning whether they deliberately increased the number of times they sent caregivers to patients' homes in order to trigger higher Medicare reimbursement payments" (Wisenberg Brin, 5/25).

In other acquisition news, Intuit has acquired Medfusion, which provides health information technologies, for $91 million, Modern Healthcare reports. "Privately held Medfusion, [of] Cary, N.C., provides Web-based services that allow patients to schedule appointments, pay bills and send providers prescription refill requests. Publicly traded Intuit, Mountain View, Calif., provides a Web-based service in collaboration with health plans to help patients keep track of their medical bills, copayments and insurance reimbursements. Both companies use each other's software and services, according to a company statement" (Conn, 5/24).

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This article was reprinted from khn.org with permission from the Henry J. Kaiser Family Foundation. Kaiser Health News, an editorially independent news service, is a program of the Kaiser Family Foundation, a nonpartisan health care policy research organization unaffiliated with Kaiser Permanente.