Home Health & Hospice Week

Nation’s largest providers report increased profits, revenues for 2018.

In the run-up to the paradigm-shifting Patient-Driven Groupings Model, publicly traded home care companies are reporting favorable earnings.

Amedisys

Amedisys Inc. reported net income of $120.1 million on revenues of $1.7 billion for all of 2018, compared to a $30.7 million profit on $1.5 billion in revenues for the previous year.

Amedisys CEO Paul Kusserow called 2018 “by all accounts an incredible year for Amedisys” in a release, noting that the company made 10 million visits in the time period.

Kusserow assured investors in an earnings call that the Baton Rouge, Louisiana-based company is preparing for PDGM. “We have clinical and operational expertise, plenty of available resources, industry experience, leading-edge technology and seasoned leadership to implement and operationalize PDGM in an effective and efficient manner,” he stressed, noting that there are 10 months left for prep. The industry is also pursuing legislative relief from PDGM’s behavioral assumption cut, he added.

At press time, stock in Amedisys was trading at $122.52 per share.

LHC

Lafayette, Louisiana-based LHC Group Inc. reported net income of $78.9 million on revenues of $1.8 billion for 2018, up from a $60.4 million profit on $1.1 billion in revenues in 2017.

Home health admissions grew nearly 73 percent over the previous year, and hospice admissions were up 32 percent, LHC said in a release. That’s due in part to LHC’s merger with Almost Family Inc. last year and acquisition of eight other companies.

CEO Keith Myers praised the company’s “strong growth” in 2018, adding that “we expect that momentum to continue.” Myers also noted the home care industry’s “dramatic transformation over the past decade. We are delivering measurable value through generating equal or superior outcomes and patient satisfaction to those we serve in the comfort and privacy of their homes where they want to be, at a fraction of the cost of care provided in more costly institutional settings.”

In the company’s earnings call, COO Donald Stelly discussed the company’s PDGM preparations. “We’re developing work streams that look exactly at … the types of patients and the required interventions and the discipline mix,” Stelly explained.

LHC stock was trading at $111.10 per share at press time.

Encompass Health

Encompass Health Corp., formerly known as HealthSouth, reported net income of $375.4 million on revenues of $4.2 billion for 2018 for all of its business lines, which also include inpatient rehab facilities and outpatient therapy services. That compares to $335.4 million on $3.9 billion in revenues for 2017.

For the fourth quarter of 2018, Encompass reported significantly increased home health revenues of $215.3 million compared to $186.3 million in the year-ago quarter, according to its earnings release. Hospice revenues also rose to $35.0 million for the quarter, compared to $20.1 million in the fourth quarter of 2017.

In an earnings call, Encompass CEO Mark Tarr noted that Encompass added 23 home health locations and 22 hospice locations, mostly from the acquisition of Camellia Healthcare (see Eli’s HCW, Vol. XXVII, No. 12). Encompass plans to spend another $50 million to $100 million on home health and hospice acquisitions in 2019, Tarr indicated.

Tarr also noted that coordination between rehab facility and home health staff is resulting “in lower discharges to skilled nursing facilities and higher discharges to home.”

The company will be preparing for PDGM in 2019 as well, Encompass officials said in the call.

At press time, Encompass stock was trading at $60.23 per share.

Kindred At Home

Last year, insurer Humana and private equity partners purchased Kindred At Home, which was formerly Gentiva. Kindred at Home is the nation’s largest home care provider, the company notes.

Humana reported net income of $1.7 billion on $54.9 billion in revenues for its entire company in 2018, compared to a $2.5 billion profit on $52.4 billion in revenues for the prior year. Revenues for home care services were $23.8 billion in 2018, compared to $24.0 billion in 2017, Humana said in its earnings statement.

“Kindred at Home incurred higher than anticipated cost in the quarter, including investments related to enhancing the capabilities of existing branches,” as well as “costs resulting from the shutdown of unprofitable branches and other costs incurred to establish an independent company,” Humana CFO Brian Kane said in the company’s earnings call.

Kindred at Home is making “additional investments … to enhance the clinical model in preparation for the Patient-Driven Groupings Model,” and undertaking a software transition, Kane added.

Humana stock was trading at $282.38 per share at press time.

Ensign

The Ensign Group Inc., the parent of home health and hospice portfolio company Cornerstone Healthcare Inc., reported net income of $26.1 million for its home health and hospice unit in 2018, according to its earnings release. Mission Viejo, California-based Ensign also reported home health revenues of $86.4 million and hospice revenues of $82.7 million in 2018, compared to $73.0 million and $69.4 million, respectively, in the previous year.

Home health and hospice revenues represent 8.3 percent of Ensign’s total revenues, it said.

Ensign’s home health and hospice growth was aided by acquisitions of HHA Alpha Nursing in Washington; Cornerstone Home Health and Hospice in Utah; and Sequoia Hospice in California, the company said. Ensign will continue to “opportu­nistically acquire when our leadership talent, geography and pricing align,” CEO Christopher Christensen said in the company’s earnings call.

For all its business lines, Ensign reported net income of $92.5 million on revenues of $1.8 billion for 2018, compared to a $40.8 million profit on $1.7 billion in revenues in the previous year.

Ensign’s stock was trading at $50.82 at press time.