The home health, hospice, and home care sectors remain among the most attractive areas of healthcare services mergers and acquisitions (M&A). These providers have become an increasingly important part of the healthcare delivery continuum, extending care beyond hospitals, physician offices, and other traditional settings. Aging demographics and patient preference for in-home care are among the main reasons for continued interest from private equity and strategic acquirers.
In addition, many home care and hospice organizations are actively considering consolidation. In our Mindsets 2027 Healthcare Industry Outlook survey, 45% of executives from these organizations said they are likely to explore integration partners to help combat margin pressure and preserve access to care and capital. Also, 64% of home care and hospice executives said their organization expects to achieve its growth targets primarily through inorganic growth, including M&A.
As a result, investment activity in the sector has remained resilient, with private equity sponsors and strategic acquirers continuing to pursue platforms and add-on acquisitions that expand geographic coverage, strengthen referral networks, broaden service offerings, and create greater density in existing markets. Ultimately, investors are underwriting the ability to translate these initiatives into sustainable census growth, operating leverage, and a more diversified revenue base.
While demand for home health, personal care, and hospice services remains high, operational challenges, lack of proper infrastructure, and headwinds from several states and CMS moratoria continue to present challenges for investors.
Below are some considerations for investors in home health and hospice, including ongoing value drivers and potential strategies.
Labor Remains the Largest Operational Risk
In the Mindsets 2027 Healthcare Industry Outlook, 82% of home care and hospice executives cited high labor expense as a top challenge to achieving financial sustainability, and 27% cited workforce productivity.
Labor is typically one of the first areas that buyers pressure-test because it has a direct impact on both earnings quality and the company’s ability to execute against the forecast.
The diligence focus generally centers on whether the business is appropriately staffed, whether clinician productivity and utilization are sustainable, and whether turnover, incentive compensation, or wage pressure could create a post-close earnings headwind.
Buyers will also gauge whether recent margin performance reflects durable operating improvements or a temporary benefit from open positions, deferred hiring, or an unsustainable staffing model.
For growth-oriented providers, incremental volume can generate operating leverage, but the analysis must account for the clinicians, branch leadership, and support infrastructure required to deliver that growth. From a deal perspective, the key question is whether the current labor base supports the underwritten case or whether additional investment should be reflected in normalized earnings before interest, taxes, depreciation, and amortization (EBITDA) and the go-forward cost structure.
Technology & Reporting: Emerging Value Drivers
For investors, there is a growing importance of operational reporting and technology infrastructure, and founders who have invested in those areas may attract premium valuations and potentially faster transaction closings.
Historically, diligence focuses on financial statements, quality of revenue, and billing processes. However, today’s buyers want to ensure that management teams can effectively and efficiently monitor census, referrals, productivity, collections, staffing, and reimbursement trends.
Given the rapid pace at which macro and micro economic conditions change, organizations that can quickly produce reliable operating metrics on a daily and monthly cadence tend to inspire greater buyer confidence.
Technology is expected to reshape this sector, perhaps greater than any other within the healthcare space. In general, these sectors have been reluctant to adopt new technology, but attitudes are shifting. Home care and healthcare executives cited IT systems and digital health platforms as their highest priority for capital investment, according to the Mindsets 2027 Healthcare Industry Outlook. Many agencies have turned to AI to help improve care delivery, patient experience, clinical decision making, and regulatory compliance. The adoption of AI and other technologies can help agencies provide better care, improve clinical oversight, address workforce shortages, and reduce time from providing care to billing and collections.
Medicare Moratorium Updates
Effective May 13, 2026, CMS implemented a six-month nationwide moratorium on enrolling new Medicare certified home health agencies and hospices. The current moratorium is set to end on November 13, 2026, with a potential for extension. Following CMS guidance, several states (including Florida, New York, Indiana, Maryland, Minnesota, and Ohio) have implemented parallel or targeted Medicaid enrollment moratoria.
Private equity and strategic investors who have historically relied on startups and de novo growth strategies may need to temporarily pivot to an M&A growth strategy to meet certain growth thresholds and benchmarks. Although the moratorium does not create formal Certificate of Need (CON) requirements nationwide, it introduces a similar barrier to entry by limiting de novo expansion and is likely to increase buyer demand and competition for existing licensed providers.
How Forvis Mazars Can Help
From rising demand driven by an aging population to operational pressures, our professionals understand the challenges you face. Our Home Care & Hospice team can help drive your organization forward with momentum and assist you in building resilience, transition readiness, and operational excellence.
For more information, please reach out to a professional at Forvis Mazars.