Providence Health has announced plans to spin off its home health division and form a joint venture with Compassus, a for-profit company specializing in home health, hospice, and community palliative care.
The goal of this strategic move is to improve service delivery in the home health sector by leveraging Compassus' infrastructure and technological capabilities. The joint venture is expected to begin operations in early 2025, pending regulatory approval from the Oregon Health Authority.
Providence will benefit from Compassus' expertise in home health care, including advanced systems for electronic medical records, mobile devices, predictive analytics, and billing. This collaboration is expected to enhance the quality and efficiency of care provided to patients.
As part of the transition, employees currently working in Providence's home health division will become employees of Compassus. The Oregon Health Authority will oversee the joint venture and ensure that it does not negatively impact access to affordable care.
The partnership with Compassus comes at a time when the demand for home health services is increasing, presenting opportunities for growth and investment in this sector. The financial implications of this move are significant, as Providence has historically received tax breaks in Oregon in exchange for providing charity care and community benefits.
The involvement of private equity in healthcare transactions has raised concerns about local control and accessibility to care. Compassus was jointly acquired by TowerBrook Capital Partners and Ascension Health in 2019, highlighting the influence of private equity in the healthcare sector. Critics argue that profit-driven motives can lead to cost-cutting measures that may impact patient care, while proponents believe that private equity can drive innovation and investment in healthcare services.
Providence's decision to spin off its home health division and partner with Compassus represents a significant shift in its operational strategy, aiming to improve service delivery and meet the growing demand for home health services while navigating regulatory oversight and the evolving landscape of private equity in healthcare.