Keith Myers | Courtesy of LHC Group

The merger of a Louisiana company with Louisville-based Almost Family came about because of customer demands and concerns about hurricanes, its chief executive, Keith Myers, said.

LHC, based in Lafayette, La., employs 32,000 who provide home health, hospice and other services in 780 locations in 36 states. The company generated revenue of $507 million in the most recent quarter and net income of $25 million.

Myers spoke to Insider by phone last week just days after the company had given a presentation at the J.P. Morgan Healthcare Conference in San Francisco.

Before the merger, which the companies completed last April, LHC had a more difficult time landing contracts with large insurance companies, Myers said.

For example, when LHC leaders talked to national private contractors and even government agencies, they often would hear that LHC would probably get more business if it were able to provide services in more places — not just the 34 percent of the U.S. population it reached at the time, he said.

Together with Almost Family, the company can reach more than 60 percent of the country, which, Myers said, makes it more relevant and appealing to large insurers and gives it more clout when lobbying federal legislators.

Myers said potential customers also prefer to deal with providers like LHC that carry very little debt. (The company financed the Almost Family merger with stock.) The company’s healthy finances enable LHC, better than many competitors, to operate under insurance companies preferred reimbursement model, which pays providers on health outcomes and cost reductions, not just how many services they provide.

LHC Group’s Louisville office. | Courtesy of LHC Group

Myers said that LHC typically gets a portion of its revenue through the traditional fee-for-service model. That portion generally covers the company’s costs. Another portion, however, comes from the company’s ability to reduce overall costs for an individual patient. Part of those savings are passed to the payer — but LHC also has a stake in that margin.

And a lot of the savings come from LHC increasingly being able to take care of patients in their homes, rather than more expensive and — for the patient less desirable — skilled nursing facilities.

That approach also improves patient satisfaction scores, which also helps LHC garner more contracts, Myers said.

The CEO also said that while the company’s headquarters location provides many competitive advantages, including lower real estate and labor costs, it does come with a challenge that leaders had been trying to address for a long time: exposure to hurricanes.

The Almost Family merger provided a solution, he said, in that the company now has an alternate site from where it can run the business. “We have two command and control centers,” Myers said.

The Louisville office, which employs 150, hosts parts of payroll, billing and other capabilities, and provides offices for Myers and other executives if they need to evacuate the Louisiana location.

“Our board is very pleased that we finally checked that box,” he said.

Myers said that, in general, he has been pleased with the integration, which has been eased by the company leaders’ long acquaintance and the similar ways in which they’ve run the businesses.

“This was a real merger,” Myers said. “It wasn’t an acquisition disguised as a merger.”