By Andrew
Donlan | March 3, 2020
Two
Florida health systems, Empath Health and Stratum Health System, are merging.
The two health care organizations revealed the news last week.
Stratum
Health System is the network that oversees and supports both Approved Home
Health and Avidity Home Health, two agencies with multiple locations in
southwest Florida. Empath Health, which focuses on patients with advanced or
chronic illnesses, also offers home health care as a part of its wide-ranging
services.
As of
now, there’s an anticipated integration date of January 2023. The goal of the
merger is to increase the breadth and scale of the companies through a
combination of the two, Rafael Sciullo, Empath Health’s president and CEO, told
Home Health Care News.
The new
company would have estimated annual gross revenue of $300 million.
“Absolutely.
Scale is a piece of this,” Sciullo said, specifically highlighting the need for
scale in chronic care management. “When I’ve met with larger payers or been
involved on a national level with [the Centers for Medicare & Medicaid
Services] in many of the pilots they’re coming forward with, there is a lot of
concern about the treatment of that patient beginning with chronic care.”
Empath’s
health care capabilities paired with Stratum’s could put them in a position to
be a company curbing that concern.
“Certainly
with our focus on home health, with our focus on PACE (Programs of
All-Inclusive Care for the Elderly), [with] our focus on HIV care,” Sciullo
said. “There’s really an opportunity for us to [serve those patients]. And now
because of the geographic coverage that we have, the concentration of the
population and the amount of people we can touch, we certainly have the ability
to do that in a very profound way.”
Additionally,
the merger will allow the health care organizations to better offer the
services to patients across the overall continuum of care.
More
specifically, the services that the soon-to-be-merged company will feature are
hospice, non-medical home care and home health services, plus physician
services, palliative care, primary care and a PACE program. The combined
enterprise will also have an HIV medical clinic.
The
combined company will have about 2,000 employees and 4,000 volunteers. Empath
Health’s Sciullo will be its initial CEO following the merger, with Stratum
President and CEO Jonathan Fleece as president of the new entity.
Fleece
is expected to succeed Sciullo as CEO after he retires in 2023,
post-integration.
The new
enterprise does not yet have a name, so the two companies will still operate
under their own brand names for the time being.
“We
experienced a lot of changes in the [health care] environment — with payers,
with demands, with regulatory bodies, with competition — and we just felt it
was absolutely critical thing to do for two leaders in not only advanced
illness and terminal care, but also chronic care, to merge our resources to
merge our expertise, our desire, our passion, and really create one entity for
the future,” Sciullo said. “If we look across the continuum of care services
and organizations under the integrated delivery system that Stratum and Empath
will be bringing together, we will be serving approximately 15,000 lives on an
annual basis.”
Stratum’s
home-based care services account for about 800 lives served on a daily basis.
Apart
from home health care, the merged enterprise will become one of the largest
nonprofit hospice providers in the United States.
Additional
reporting from Jim Parker
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