Providence agrees to move home health and hospice to joint venture with private company

Providence Health plans to spin off its home-health services along with hospice and palliative care into a new joint venture that will be managed by a private company. The move will affect about 700 patients receiving care every day in Spokane County.

The Catholic not-for-profit health system’s agreement is with Compassus, a for-profit, Tennessee-based provider of home care services in 30 states. The joint entity’s name is Providence at Home with Compassus.

After a regulatory review, the deal is expected to close in early 2025. Providence and Compassus will each own a 50% stake. The new venture is part of a strategy to expand and improve home-based services, but also to cut costs. Providence, which operates Sacred Heart Medical Center and Holy Family Hospital in Spokane, declined to disclose the financial details of the joint venture.

“Demand for these services will only continue to grow as the population ages,” Providence said in a statement. “At the same time, the cost of providing care remains on the rise, with pharmaceuticals, medical supplies and the national shortage of health care professionals continuing to drive up expenses.

“To ensure continuing affordability for patients and communities while expanding access to these services, innovation is essential. Providence chose this joint venture because Compassus brings a proven track record for high-quality home-based care, as well as technology and devices that will further support nurses and other caregivers delivering care in the home.”

Compassus is set to operate the joint venture at 24 home health locations in Alaska, California, Oregon and Washington, and at 17 hospice and palliative care sites in those states, plus Texas.

In Spokane County, Providence Visiting Nurses Association Home Health has an average of 650 patients daily, with more than 6,000 home visits each month. It is expected to move under Compassus’ management early next year. The unit is Spokane’s oldest provider of skilled home health care for conditions such as post-surgical care or heart failure, according to its website.

The newer Providence Hospice Spokane, averaging 30 patients a day, won’t go under the joint venture until 2027. It was recently certified as a Medicare hospice agency, and a Centers for Medicare & Medicaid Services’ rule requires majority ownership to stay the same during a 36-month period after certification. The hospice service has cared for 167 patients in the past 12 months.

About 150 Providence employees work in the local home health and hospice services now, but they later will move in a “phased transition” to become employees of the joint venture, according to Providence.

Compassus’ closest locations to the Northwest are in Montana. The company has more than 7,000 employees in over 270 locations, mainly in the East, Midwest, South and Southwest. It has formed similar joint ventures with other not-for-profit health systems, such as Ascension, Bon Secours Mercy Health and OhioHealth.

The joint venture with Providence also will include some services in Southern California called private-duty, generally described as assisting people with daily personal care for medicine, meals, mobility and light housekeeping.

“The new organization will continue to provide spiritually-grounded care to help improve quality of life,” according to Providence.