Brightspring Health Services (NASDAQ: BTSG) aims to increase synergy across the service line by expanding its home care programme.
Specifically, the company is considering expanding its line of injecting at home, primary care at home and rehabilitation services, according to Jennifer Phipps, executive vice president and chief financial officer at Brightspring. Overall, Brightspring expects the home health segment to continue to grow in terms of service lines and margins.
“Our home health segment, we see good market growth in that area, and we expect it to continue,” Phipps told the 46th Goldman Sachs Global Healthcare Conference on Wednesday. “We believe we can grow outside, and we focus on initiatives that allow us to grow outside.
Based in Louisville, Kentucky, Brightspring's home health segment includes Home Health, Hospice, Primary Care, Rehabilitation and Personal Care Services lines.
Brightspring's core strategy across each business line focuses on generating quality leads and driving volume growth, promoting synergy across the service line for patients with multiple needs. The company's Carerx drug management program is an example of this strategy, with fewer hospitalizations compared to the average home health patient, Phipps said.
Not all home health patients use the Carerx program, Phipps said, and the company works with payers to ensure that they pay appropriate fees for these programs.
Expanding Brightspring's home-based primary care line “will unlock more opportunities for us throughout our business,” Phipps said. Primary care links the service line as doctors and nurse practitioners visiting patients' homes for primary care appointments can identify and address other issues that could lead to hospitalization.
In addition to growing its primary care business, the company is looking to expand its rehabilitation program.
“It's really about access and…it's better coordinated care, which is why we do this,” Phipps said. “We're also doing this to allow us to unlock differential payment plans from the perspective of value-based care strategies. We're in that early inning, but we're producing results that drive cost savings for the system, so we should be able to share those savings.”
Brightspring is primarily engaged in an upside-based care model and “trying to treat it very carefully” rather than taking risks, Phipps said.
The company views long-term care pharmacies and home infusion pharmacies as the biggest opportunities to improve margins, Phipps said.
As the service line grows, Brightspring also aims to maintain its robust M&A track record. The company focuses primarily on small tack-in transactions, with most of which are unique and based on long-standing relationships.
“We can work on relationships and theoretical transactions that we've been working on for five years, understand the best quality providers in the market, build relationships with them, and then stay close for any period,” Phipps said. “That pipeline has never beenier.”
About three years ago, Brightspring made a large investment, and now allows its acquisitions to become more efficient, Phipps said. Brightspring previously had several different operating systems, but by investing time and energy to move to one platform, the company has ensured proper reporting and has better leveraged processes and infrastructure.
Phipps also commented on Brightspring's announcement on Tuesday. KKR&Co is an investment company with a majority shareholder. (NYSE: KKR) plans to sell 2.1 million shares of 14 million Brightspring shares, with an option to sell 2.1 million shares.
The news of the second round of recruitment may have contributed to the company's stock price decline this week, Phipps said. She said that KKR owns only a small 44% of the company's stake if the secondary offering is fully implemented.
“There's no reason to believe there's an extremely unbalanced way of how they're approaching the Brightspring exit, but they're still very supportive of our company, our track record of growth and, ultimately, what we're trying to offer as a company,” Phipps said.
