The Dayton Daily News will continue to cover this story as it develops and its impact becomes clearer.
Two major area health companies are forming a new home care business, a move that will affect 160 area hospital employees..
Kettering Health Network has agreed to partner with Alternate Solutions HomeCare, also headquartered in Kettering, said Kettering Health spokeswoman Elizabeth Long.
“Through this joint venture we’re going to merge our Home Care and InHome Care services with Alternate Solution’s Dayton area operations,” Long said. “Alternate Solutions will have mangement oversight.”
The hospital group Kettering Health Network is one of the region’s largest employers of more than 10,000 people, with total 2011 revenues of approximately $1 billion. The system operates eight hospitals.
Kettering Network Home Care and InHome Care have 160 employees, Long said. The home care divisions serve 650 to 750 clients a day on average across a seven-county service area, Long said.
Alternate Solutions HomeCare, 1251 E. Dorothy Lane, has approximately 2,500 patients in a service area that touches four states. Alternate has approximately 600 employees companywide, executives said in fall 2012.
Officials with Alternate Solutions could not be reached Friday.
Plans are still being formalized, but Kettering Health and Alternate Solutions believe a “substantial majority” of Kettering’s 160 home care and in-home care employees will be offered jobs with the new company, Long said.
“There will be no interruption in patient care during this transition,” Long said.
“The joint venture will leverage the strength of both partners. It will minimize duplication of services, use innovative software technologies, maximize operational efficiencies and meet the growing demand for home care,” she said.
Competing hospital group Premier Health Partners has a home care business called Fidelity. “At this point we don’t have any plans to change how Fidelity is doing their business,” said system spokeswoman Diane Ewing.
Because of financial pressures due to low Medicare and Medicaid reimbursement rates, key revenue streams for home care, “we may see more merging of our home care agencies in Ohio just so they can stay above water and continue to operate,” said Kathleen Anderson, president of Ohio Council for Home Care and Hospice.
“It doesn’t surprise me because all health care providers are facing reimbursement cuts and are being challenged to provide better care and better outcomes while reducing costs,” said David Tramontana, chief executive officer of Home Care by Black Stone, which services a 15-county area including Cincinnati and Dayton. “I think what the hospitals are doing, they’re kind of jettisoning anything with a negative cash flow.”
In a credit research report released April 2012 for Kettering Health, Moody’s Investors Service downgraded Kettering’s outstanding bond debt to A3. It was previously rated A2. The highest possible rating is Aaa.
The lower rating was driven by Kettering’s operating performance in 2011, which didn’t meet budget targets, according to the Moody’s report.
Moody’s noted Kettering Health’s track record of past profitable operations, but said financial results have been more “modest” in 2010 and 2011. Hospitals Grandview and Greene Memorial had weaker results in 2011, and Fort Hamilton Hospital had operating losses in 2011, according to Moody’s.
It was not clear Friday if the new partnership has anything to do with finances.
“We just determined partners with an agency with expertise in home care like Alternate Solutions would just help us to care for patients in the home in the best way possible,” Long said. “One of the things we like about Alternate Solutions is they’re based in Kettering.”
Home care is a fast-growing segment of the local health industry, an industry that’s become a major regional economic driver. Home care companies are growing to meet the demands of an aging population that prefers to stay in their homes as long as possible, experts say. Ohio is aging fast, and people are living with more chronic conditions, living longer and using technological advances to manage their conditions at home.
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