Kindred Healthcare’s acquisition of Gentiva Health Services in 2015 significantly reshaped the post-acute care landscape in the United States. This strategic move established Kindred at Home as the nation’s largest and most geographically diverse provider of home health and hospice services, solidifying Kindred’s commitment to integrated care delivery.
Expanding Reach and Capabilities Through Gentiva
The integration of Gentiva Health Services into the Kindred Healthcare network brought numerous benefits, significantly expanding the company’s reach and capabilities. The combined entity serves over 1.1 million patients annually across 47 states, employing approximately 105,200 individuals. This acquisition broadened Kindred’s service offerings to encompass the full continuum of care, from hospital to home, strengthening its position as a leading provider of long-term acute care, inpatient rehabilitation, and post-acute care services.
Gentiva’s footprint overlapped with 20 of Kindred’s 23 Integrated Care Markets, strategically located within the top 30 Metropolitan Statistical Areas in the U.S. This geographic alignment fostered improved care transitions and facilitated potential revenue synergies through cross-referrals within the combined network. The acquisition of Gentiva, coupled with the acquisition of Centerre Healthcare Corporation, significantly enhanced Kindred’s ability to deliver coordinated care in key markets.
Financial Strength and Synergies
The acquisition of Gentiva Health Services contributed substantially to Kindred’s financial strength. Pro forma annual revenues reached approximately $7.2 billion, with operating income exceeding $1 billion, inclusive of $70 million in anticipated cost synergies. These synergies were projected to be fully realized within two years, with approximately half achieved in the first year. Beyond cost savings, Kindred expected to generate over $60 million in annual revenue synergies through improved patient care transitions and increased volume growth from cross-selling opportunities across the expanded service platform.
The transaction was immediately accretive to Kindred’s earnings and cash flow. The combined acquisitions of Gentiva and Centerre were estimated to contribute $0.40 to $0.60 to Kindred’s standalone earnings per share by the end of 2016. Projected pro forma adjusted operating cash flows ranged from $350 million to $400 million.
A Commitment to Integrated Care
The Gentiva acquisition underscored Kindred’s “Continue the Care” strategy, focused on providing patient-centered, coordinated care across the entire care continuum. This integrated model, favored by both consumers and payers, aims to enhance quality, clinical outcomes, patient satisfaction, and care transitions while reducing overall healthcare costs. It also aligns with the growing emphasis on value-based care and the needs of Accountable Care Organizations (ACOs) and Managed Care Organizations. This strategic acquisition enabled Kindred to strengthen its market leadership, expand its clinical capabilities, and deliver comprehensive care solutions across a wider range of settings.
Conclusion
The acquisition of Gentiva Health Services was a transformative event for Kindred Healthcare. By integrating Gentiva’s extensive home health and hospice network, Kindred significantly broadened its service offerings, strengthened its financial position, and reinforced its commitment to providing high-quality, integrated care across the continuum. This strategic move positioned Kindred as a national leader in post-acute care, well-equipped to meet the evolving needs of patients and the healthcare industry.
