Brookdale Senior Living has agreed to sell its majority stake in Brookdale Health Care Services (BHS) — provider of home health, hospice and therapy services — to HCA Healthcare, the country’s largest senior living company announced Wednesday. The purchase price is $400 million.
The move is designed in part to position Brookdale’s core senior housing operations for sustained growth, the company said.
Brookdale will maintain a 20% equity interest in BHS, and Brookdale senior living residents still will have access to the services it provides, Brookdale said. In fact, Brookdale said that the new partnership will provide opportunities to improve healthcare service offerings within Brookdale’s communities to enhance residents’ experience and health outcomes.
“The health and wellbeing of our residents is at the core of Brookdale’s mission,” Brookdale President and CEO Lucinda “Cindy” Baier said in a statement. “Today’s partnership with HCA Healthcare, a leading healthcare organization, will continue the high quality services delivered to our residents and patients, strengthen our liquidity position and provide meaningful opportunities for growth through better integration of services across the entire care continuum.”
The venture also will help enhance the growth prospects for BHS, given the complementary nature of services of both organizations, Brookdale said.
BHS operates 57 home health agencies and 22 hospice agencies across 26 states, along with 84 outpatient therapy locations. Ninety-eight percent of its home health agencies earned a 4 or better Quality Star Rating from the Centers for Medicare & Medicaid Services in December, according to the company.
HCA Healthcare has more than 2,000 sites of care at which more than 32 million patient encounters occur annually. Brookdale will join HCA Healthcare’s network of care through the new venture.
“HCA Healthcare’s objective is to be the healthcare system of choice in the communities we serve through the development of comprehensive services and by delivering high quality, convenient care to our patients,” HCA Healthcare CEO Sam Hazen said in a statement. “We believe this opportunity to partner with Brookdale will expand the services we offer and enhance our ability to deliver a better experience for our patients as well as for Brookdale residents.”
Brookdale said the transaction represents the latest material announcement in the company’s ongoing efforts to drive meaningful shareholder value, following its July 2020 lease renegotiation with real estate investment trust Ventas and the January 2020 sale of its entry fee continuing care retirement community venture interest to Healthpeak Properties.
In 2018, Baier had said that an exit from the home health business was a possibility.
“The home health business is a very attractive business, and there’s a lot of interest in the business that we operate in today,” she said at the time, speaking to those attending the Jefferies Global Healthcare Conference in New York City.
“The most important thing is to make sure that those services are available for our residents, but what we have said is, if there is something that creates a lot of value for our shareholders, we’ll absolutely look at it,” she added. “Now that could take many forms, but the most important thing is to recognize that the core of our business is serving seniors and to allow them to have the best life possible, and so making sure they get the services is really our primary focus.”
