Home Health & Hospice Week
Hospice Companies Troubled Despite Surging Earnings
A 28 percent spike in revenues and 32 percent jump in income wasn't enough to keep VistaCare Inc.'s investors happy.
The Scottsdale, AZ-based for-profit chain reported net income of $3.7 million on revenues of $53.7 million for the quarter ended March 31, compared to a $2.8 million profit on $42 million in revenues for the same period in 2003.
But Vista lowered its earnings guidance for the whole year 5 percent, to $0.93 to $0.98 per share, and its stock price plunged more than 40 percent from May 6 to May 18. Vista blamed the reduced guidance on problems with implementing its marketing program. The company aims to reach 135 marketers by the end of this month, it said in an earnings release.
Vista recorded an average daily census (ADC) of 5,144 patients, 3,842 admissions and an average length of stay (LOS) of 108 days for the quarter.
The company also announced the opening of a new Bloomington, IN location.
Odyssey Stresses Compliance
Officials in Odyssey Healthcare Inc.'s May 4 investor conference call took pains to stress the for-profit chain's quality of care and Medicare compliance, after numerous law firms have brought shareholder suits against the Dallas-based company (see Eli's HCW, Vol. XIII , No. 18, p. 142).
"We are able to show strong admissions and patient census results because of our quality of care and our marketing efforts," said Odyssey CEO and President David Gasmire. If Odyssey's quality of care were suspect, referral sources wouldn't refer, Gasmire insisted.
The company has 12 clinicians reporting to Senior Vice President of Clinical and Regulatory Affairs Kathy Ventre "whose entire responsibility is assuring that our hospice programs remain Medicare compliant," Gasmire added. Plus supervisors at each location oversee regulatory compliance.
Odyssey isn't overstaffed, Gasmire insisted. A nurse's caseload is 10 patients, a home health aide's is 11 patients and a social worker's is 35 patients, he said.
The growth of admissions is largely due to the increase in the company's marketing staff, Gasmire said. Odyssey went from 28 marketing reps in 2003 to 61 reps averaging four or more admissions per week during the most recent quarter.
The company also has a better handle on the per beneficiary cap limitation that sparked the lawsuits. Odyssey saw $2.2 million in exposure for per beneficiary cap limits during the quarter, as opposed to the $3 million it first projected, CFO Doug Cannon said in the call.
Odyssey recorded an ADC of 8,723, admissions of 7,330 and an average LOS of 75 days for the quarter.
The company acquired Crossroads Hospice of Oklahoma in Tulsa, effective May 1. Over the past year, Odyssey added 17 new programs and currently has six more in the pipeline, it says.
VITAS Prospers Despite Roto-Rooter Loss
VITAS Healthcare Corp. saw its revenues climb 24 percent over last year to reach $124 million in the quarter. Miami-based VITAS' net income was $5.3 million for the quarter, says Cincinnati-based parent corporation Roto-Rooter Inc. But Roto-Rooter's overall loss was $7.1 million for the quarter.
Roto-Rooter stockholders voted to change the company's name back to Chemed Corp. May 17. The name change will take place "as soon as practicable," the company says.
VITAS recorded an ADC of 8,097 and an average LOS of 55.7 days for the quarter. Proving how widespread short-stay patients are, however, VITAS noted its median LOS was merely 11.0 days.
VITAS recently opened an office in Camarillo, CA to serve all of Ventura County, it says. And its programs in New Jersey Shore and in San Fernando Valley, CA, were recently accredited as Jewish Hospices by the National Institute for Jewish Hospice.
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