Swope Community Enterprises Acquires Kansas City Home Care

May 2012 | Kansas City Business Journal | David Twiddy       Download PDF      Print

Swope Community Enterprises has quietly acquired Kansas City Home Care Inc., giving the venerable community organization entry into new health care markets and greater access to privately insured individuals.

The organization, which operates Swope Heath Services at 11 metro-area locations, bought Overland Park-based Kansas City Home Care on March 14 for an undisclosed amount.

Chairman and CEO E. Frank Ellis said that adding the company will allow Swope to finally offer private-duty home care, geriatric case management and, eventually, services to transition patients between hospital and home.

And partnering with Cheryl Smith, who founded Kansas City Home Care in 1989 and will remain CEO, will help both organizations move toward a patient-centered medical home model, which lets one team of providers coordinate all of the patient's care, Ellis said. Such arrangements are expected to become the dominant health care model with federal regulations and changes in the insurance industry.

"We approached her several years ago to try to forge a partnership, realizing that the population is aging, health care reform is going to require more case management and more intimacy with your patients and your customers on a private side, and Swope has not traditionally been in that service," Ellis said.

The deal also will give Swope increased experience serving patients with private insurance. In keeping with Swope's historical role as a health care safety net organization, the vast majority of patients coming to Swope Health Services are either uninsured or eligible for Medicaid or Medicare.

"It made perfect sense strategically for us to be able to offer an entry-level service to grow and expand for home care, private duty, case management, transitional care to a population that has the means to pay for it," he said.

Smith said that joining Swope will give her company the added resources to expand to parts of the metro area it had not been able to cover significantly, such as north of the Missouri River.

"We've always provided private-pay home care and care management and done the traditional piece, but now it's going to be a little bigger and cover more people and be a little more in depth," she said.

"This medical home model is very exciting for us. We knew that there was going to be a piece that we really could not do without some sort of partnership, so this has been timely for us."

The company also will be able to take advantage of Swope's recent investment in a new electronic health record system, providing it with the tools to track and show how its services are leading to better health outcomes for patients – another expected demand from regulators and insurers in the near future.

Kansas City Home Care has about 100 caregivers. As a separate division of Swope, the company expects to triple its caseload in the next 12 to 18 months, Smith said, and will give Swope a platform to add home-care companies and services in the next three to five years. The goal is "a continuum of services vertically and horizontally... that we will offer for this population," Ellis said.

Combinations like this probably will increase as health care providers try to prepare for a changing landscape in how health care is financed and evaluated, said Jeremy Simmons, managing director of Overland Park-based Allied Business Group.

Simmons' company wasn't involved in the Swope-Kansas City Home Care deal, but he said Allied has helped two sales of durable medical equipment distributors in the past year. He said home-care services are expected to be a prime target for acquisition because it's cheaper than caring for a patient in a hospital or long-term care facility. "This is where all of the health care is going right now," he said. "You're seeing all of health care trying to move back inside the home, and they're trying to figure out ways to keep people in the home for as long as they can.

Because the government's Medicare program is running out of money, and we've got to figure out how to cut costs, and the easiest way to do that is keep these patients in their home where they can either take care of themselves or have a home health care company come assist in that."

*Allied Business Group was renamed Mariner Capital Advisors in October 2017.