LifePoint, ScionHealth CEOs Share Successful Acquisition and Launch

David Dill and Rob Jay share details about the LifePoint and Kindred transaction, the launch of ScionHealth, and the organizations' future innovations and strategies.

Just before Christmas, LifePoint Health announced the completion of its acquisition of Kindred Healthcare, just two months after the transaction was first announced.

Through the transaction, LifePoint grew its already large footprint across 29 states, and now has more than 65 community hospital campuses, over 170 additional sites of care, and over 30 rehabilitation and behavioral health hospitals added from Kindred. The health system now has more than 50,000 employees and around $8.5 billion of revenue.

The successful acquisition also marks the launch of ScionHealth, a new health system based in Louisville, Kentucky, that will operate independently from LifePoint, with LifePoint's previous executive vice president of integrated operations at the helm.

ScionHealth's footprint spans 79 hospital campuses across 25 states, and it includes 61 long-term acute care (LTAC) hospitals, which were previously a part of Kindred, and 18 short-term acute care (STAC) hospitals, previously owned by LifePoint. It has around $3.5 billion net revenue and 22,000 employees.

LifePoint CEO David Dill and ScionHealth CEO Rob Jay spoke with HealthLeaders about the LifePoint and Kindred transaction, the launch of ScionHealth, and the organizations' future strategies in a recent interview. The conversation has been edited for brevity and clarity.

An Acquisition Leads to New and Unique Opportunities

The COVID-19 pandemic brought the need for more diversification and more service line offerings across LifePoint's continuum of care.

"We've now spent the last two years taking care of our communities [during COVID], and we felt it was going to be important to broaden out the service offering and that's what led us to Kindred," Dill said.

Kindred had three main service lines, which LifePoint saw as an opportunity to expand their service offerings, including long-term acute care hospitals with a significant footprint, a fast-growing rehab platform, and a behavioral health platform.

"All three of those service lines and service settings are extremely important across the continuum. We'll be deploying these services in our communities," he added. "It will bring more diversification, more resources, more expertise, all focused on keeping patients close to home for care, which is, and remains, the mission of our company at LifePoint, of making communities healthier."

"There's no question that quality has been important at LifePoint for years, and Kindred has the same philosophy. Taking the shared vision of expanding healthcare across the continuum while focusing on quality through partnerships just made it a logical combination of the two organizations," Dill said.

"As we began the integration of [LifePoint and Kindred], it became crystal clear to our leadership team that Kindred had a deep bench in a strong management team, deep resources, and experience and expertise, and instead of combining into one company, it gave us a unique opportunity to build two companies, and that's what led to the launch of ScionHealth," Dill said.

"We looked at the portfolios of the companies to put unique assets together that will allow both organizations to focus and use the deep bench of talent, resources, and expertise that both companies have, and kept those going," Dill said. "We were able to keep the company ScionHealth in Louisville. When we first started talking to Kindred, it was important that we were going to keep a presence in Louisville."

"While we view ScionHealth as a startup, when you think about the corporate infrastructure chassis upon which we're building, the 25 states, the financial stability that comes with it is pretty impressive," Jay said. "And for me, I feel very fortunate as the CEO of ScionHealth to have this as the launching point for the company."

"I'm excited that Rob is taking it; there's a great deal of confidence, there's a great deal of collegiality between our two organizations, to make sure that ScionHealth gets off to a really good start," Dill added.

"Starting from scratch and needing to build infrastructure, it takes time, exposes you to potential risks, and is costly, so we found ourselves in a unique situation to put these two groups of assets together on a chassis that was already there," Jay said. "It was a chassis of leadership that was familiar with these types of transactions, that was ready to do something different, and create something new."

"Another unique part of what we put together between the two companies is you had teams of people who had been part of buying companies and putting companies together. So, there was just a lot of familiarity with what we were trying to do," Jay added.

"We worked collaboratively as we planned for integration with the Kindred teams to make sure that we explored all the opportunities to make sure we supported the businesses," he said. "It was a very familiar process to a lot of us that allowed us to get up to speed very quickly, to get to closing, so that upon closing we could move forward with running the businesses."

"If you look up the definition, [a scion is] a twig or an offshoot of a plant. The other definition is a descendant of a notable family," Jay said. "So, if you think about those two definitions, we thought it was ideal for what we were building here; something new, but also strong from the two legacy companies from which it came."

Innovating and Strategizing for the Future

Both companies are aligned when it comes to caring for their communities and strategizing for the future, including launching innovations in a meaningful way and searching for further opportunities to grow the companies and expand into more communities.

"Innovation [is] core to both of our organizations," Dill said.

"Right before Christmas, we launched our LifePoint Forward innovation strategy, and we entered into a relationship with a venture studio company in New York called 25Madison. We formed 25m Health, which will be a company specifically designed to build companies by solving problems that exist within ScionHealth and LifePoint, and then we hope to be able to commercialize those," Dill said. "When I think about the learnings from COVID, being more innovative and being more diversified is core to our success."

"LifePoint and Scion are both going to have access to and participation in the business of 25m Health, so it creates an exciting and unique opportunity," Jay said.

The organizations will also collaborate in the future when opportunities arise.

"This is all about aligning both companies; it was never that important to me to have a big company. The size of the company never really mattered. Here's what matters to me and what matters to Rob: being the very best and most that we can be for communities that have trusted us to be their healthcare provider, wherever it is across that continuum. This transaction allows both of these organizations to fulfill the promise that we've made. I do think there'll be natural ways for us to continue to collaborate," Dill said.

"I'm excited about integrations like we're going through. We're taking a big business in Kindred and we've moved some assets into different companies to allow both companies to focus on what they do well. We've moved people between organizations, and that creates challenges and excitement. It also creates an opportunity to learn from new team members that are coming into the team and adopt best practices. Every time we've grown as a company, we've learned something as we've grown, and we can take those learnings to improve care at the bedside. I'm excited about the learnings that we will uncover here over the next several weeks and months as we integrate these companies," Dill said.

Dill added about future growth for the company, "We think there are significant opportunities for us to continue to deploy capital to grow and expand not just in the markets that we're currently in, but also grow and expand the portfolio over time."

"David and I are aligned on where we're excited for both companies," Jay said. "For us at Scion, it's an opportunity to take out a blank sheet of paper and start something new. I want to create exciting opportunities for everyone in the company, especially all our care providers. Going through the pandemic has been extremely hard. At both companies, we're going to make sure that we're taking care of our employees, our caregivers, and our providers because they're tired. We're making sure that—whether it's integration, growth opportunities, innovation — we're doing whatever we can to enable our employees, caregivers, and providers to stay in the game, to keep taking care of the communities, and honoring the commitments that we've made. Ensuring that quality care continues remains a focus for us and all of the things that we've discussed to this point will lead us to be able to do that."

"The intentionality around taking care of our workforce to enable us to continue to do what we need to do for our communities is something that both organizations are going to remain focused on," he said.

"None of this would have been possible without 60,000 caregivers around the country doing what they've done," Dill agreed. "They are the heroes of this, and they put us in positions to be able to do this."