‘A huge plus for Lafayette’: How LHC Group’s deal with UnitedHealth could mean rapid growth | Business

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Back in 2005, LHC Group was at a crossroads. The Lafayette-based home health care company could see the demand and growth potential in its industry, but the challenge was getting the funding.

The way the industry was back then, getting a bank loan was out of the question. So was seeking help from a private equity firm.

That’s when LHC Group’s leaders made a move that changed the company’s trajectory: They went public. Keith Myers, CEO and co-founder, recalled they “had no clue what going public meant” but raised $200 million in three weeks. Shares began trading at $14.

On the night LHC Group went public, Myers said, an investment banker posed an unexpected question: Where will this company that has now gone public establish its headquarters?

“I said, ‘Lafayette,’ ” Myers said. “In a room with 40-50 people, mostly bankers, he laughed. He said, ‘You’ll soon find out you can’t build a public company in Lafayette.’ He said we’ll talk about it later. I can’t tell you how many times I’ve thought about that over all the years.”

The move to stay in Lafayette, as it turned out, was the right one. LHC Group grew into a mammoth home health, hospice and personal care company at its sprawling complex on Hugh Wallis Road. With more than 30,000 employees across 37 states and 700 employees at its Lafayette operations center, it did over $2.2 billion in net service revenue in 2021 with shares valued at over $166 at the close of market Friday.

Over the years, Myers said, he’s been asked for his secret to success. He points to the employees in Acadiana and “our genuine desire to help one another and work together. It’s more palpable here,” he said.

Now the company is at another transitional point, having reached an agreement in March for UnitedHealth Group, the nation’s largest health insurer, to acquire it for $5.4 billion.

The news made headlines across the country. It was a strategic move for UnitedHealth, which before had never acquired a traditional home-care agency, and it was part of a wave of mergers among companies specializing in home care.

The acquisition was not a surprise, said Peter Richiutti, a finance professor at Tulane University who tracks regional stocks across the region. Both LHC Group and Baton Rouge-based Amedisys, which also specializes in home health and hospice care, had gobbled up so many smaller health care companies across the country that it was near impossible for another company to elbow its way into the industry.

In the end, the acquisition will be a good one for the company and its presence in Lafayette, he said.

“I think this will end up being a huge plus for Lafayette and the workers and everything else,” Richiutti said. “You got bought out by somebody who’s really not in the business. And it’s a big company with deep pockets that will enable you to make more acquisitions. It’s like having a rich aunt — United Health Care bought them just for who they are.”

The move was welcome news to many of the company’s clinicians, Myers said, because it will allow them to care for more patients and carry on the company motto of “It’s all about helping people.”

The company’s leadership team will continue forward as part of Optum Health, a fast-growing division of UnitedHealth Group that works with more than 100 health plans. The deal is expected to close in the second half of this year.

The news of the acquisition, as those things have a natural tendency to do, initially created some nervous energy in the community, said Mandi Mitchell, CEO of the Lafayette Economic Development Authority. But company officials quickly noted the move would not lead to any disinvestment in the Lafayette office.

“We have been in close contact with some of the executives at LHC,” she said. “It means more growth and more investment in our area. It was just an extremely strategic, extremely wise-choice move on the part of the executives there. They’ve been making some very wise moves to lead to this point.”

How it started

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Ginger Myers was not yet born when her sister died in a car crash just weeks before graduating from high school. She was all set to enroll at then-T.H. Harris Vo-Tech School in Opelousas to study nursing when she died.

That sister, turns out, was a big reason Ginger Myers chose the same career path. She even enrolled at T.H. Harris.

“My mom always talked about her, that she was going to be a nurse,” Ginger Myers said. “It was instilled in my heart by my mother, and I’m grateful for that. I never forget my mom or my sister. They’re the reason I even got to have that nursing degree and where things are now that I can offer more to nurses and people wanting to be nurse.”

In the early ’90s, Keith and Ginger were living in Palmetto and Ginger was working at Opelousas General Hospital. She began connecting with patients who didn’t want to go to a nursing home and wanted “peace and assurance” that someone would care for them in their homes. She would visit the patients after work, sometimes taking a four-wheeler or a boat to get to the rural communities. 

“I’ve found that you just sit and listen and give them that assurance, it can make all the difference in the world,” she said. “Was it at night? It didn’t matter. I’d go. Sometimes they just needed that hug. They needed you to listen.”

That’s when Ginger began forming the idea of a home health business — a company that could bring together partners in the community to provide care at home. She came up with the company slogan on a napkin on the blue tile kitchen table in their home.

“It’s all about helping people” is one of the first things you see today at the company’s headquearters and one of the last things you see pulling out at the end of the day. 

How it’s going

Among the board members in those early days were longtime U.S. Sen. John Breaux and Congressman Billy Tauzin. When Breaux left public office, he became a lobbyist for the health care industry. Among his biggest clients was UnitedHealth Group, and he connected Keith Myers to the company years ago.

Through the years, Myers said, LHC Group was able to raise awareness of quality long term care. And over the years it’s become harder for home health agencies to deal with managed care companies and deliver the necessary care to patients. With Breaux’s help, the foundation was set for a merger.

Joining UnitedHealth Group will allow LHC Group to access to more patients and more hospitals and reduce the time it takes to process a doctor’s orders and get care to the patient. And the majority of the patients signing up for managed care are minority or low income and need services the most, he said.

“Everybody wants to move more care in the home now and care for patients in the least costly setting,” Keith Myers said. “How do our employees feel (about the acquisition)? All our clinicians feel like this weight is lifted off of them. Every day they deal with hospitals and physicians that are saying, ‘I need to refer a patient to you, and it’s a managed care patient.’ And the clinicians have to say, ‘I’m sorry, we’re not able to accept them because we don’t have a contract with (the managed company).’”

The acquisition will allow LHC Group’s expansion to continue, and possibly at an accelerated rate, Myers said. UnitedHealth, he says, is large enough where they quickly innovate and expand and not have it affect them as a company as much as it would a smaller company.

UnitedHealth, through Optum, expects to double LHC Group’s patient volume in about three years. 

“Our roadmap and our strategy, which is very well-defined, is to cover the entire United States,” Keith Myers said. “This merger … is just going to accelerate that. They want us to get there fast.”

Thinking back to 2005, Keith Myers said it was the right decision then, and it’s still the right decision to keep the company in Lafayette. 

“We built this campus to support the full coverage of the whole United States,” he said. “As we build out the rest of the footprint, this building will fill up with 1,600 people.”





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