Seniors Housing Weekly Update - Gentiva Health Getting Pricey In Tough Home Health Business

July 22, 2014

 

July 22, 2014. 60 Seconds with Steve Monroe. One home health cae provider is getting out of the business while the bidding war for Gentiva escalates......

Gentiva Health Getting Pricey In Tough Home Health Business

For anyone who has known me over the years, I have been a big proponent of seniors housing and care companies getting into the home health and hospice business. That was one reason why I liked Kindred’s idea of buying Gentiva Health Services, something which may or may not happen. But we just heard that Pennsylvania-based Country Meadows Retirement Communities is abandoning its home health services later this summer, citing staffing and high employee turnover as the culprits. Assuming the economy continues to strengthen, these issues will be even more problematic, not to mention cost pressures with the push to increase minimum wages by 20% to 50% in some states. The bottom line is that home health and hospice is not an easy business, which is why there should be some concern that the bidding for Gentiva keeps on going up. Kindred Healthcare has now matched an anonymous bidder’s $17.25 per share all cash bid, topping our expected Kindred increase to $17.00 per share we wrote about last week. With Gentiva’s share price now over $18 per share, bidders will have to start thinking about how they will pay for that future staff turnover.   

 

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