Get knocked down eight times, get up nine. That’s the mantra that the home-based care companies have followed after a volatile few months — and years — on the public market.
In July, most of them rebounded, at least to some extent.
“The same issues are still persisting — inflation is as challenging as ever, as is staffing,” says Stoneridge Partners Managing Partner Joe Lynch. “But these companies still have a future-facing, strong value proposition.”
The Stoneridge HHI increased 8.5% over the last month, while the PAI increased 6.5%.
Home Health Index
It is not an easy time to be a home health provider. Enhabit Home Health & Hospice’s (NYSE: EHAB) rocky start on the public market is evidence of that.
The Centers for Medicare & Medicaid Services has proposed payment rates for CY 2023 that, if finalized, are considered an existential threat to the industry. All the while, staffing costs and inflation are eating away at bottom lines.
As Enhabit went public in late June, its cost-per-visit rates were shooting up, it was in the wake of the ominous proposed rule, and, all the while, it was dealing with Medicare Advantage (MA) plans that weren’t yet willing to pay fair rates for its services.
But providers are still finding ways to innovate. Outside of home health, they are exploring new ways to bolster their value propositions. Amedisys Inc. (Nasdaq: AMED), for example, has taken its acquisition of the higher-acuity care enabler Contessa Health and hit the ground running.
“We continue to be pleased with the progress Contessa, our higher acuity segment, is making as it’s generating meaningful growth in Q2, and positioning itself for material ramp for both admissions and revenue for the second half of 2022,” Amedisys CEO Chris Gerard said on the company’s second-quarter earnings call.
Post-Acute Care Index
Addus HomeCare Corp. (Nasdaq: ADUS) is in an interesting situation. Unlike most of the companies in the post-acute care index, it is down only 0.7% YTD. It was also up over 11% month over month.
One contributing factor could be the company’s payer mix.
Given the above-mentioned proposed Medicare fee for service proposed rule for home health care, Addus’ personal care, hospice and home health diversification bodes well for it, as does its reliance on other payment sources than Medicare.
Quote of the Month
“They want to be at home around their things, in their castle. The benefit of home health care is that we enable people to stay at home and age in place independently for as long as they want.” – Lori Yount, Vice President of Operations for CareBuilders at Home
Read the Full Article Here: How Compassionate Home Care Can Help Your Loved One Live Their Best Life
See It To Believe It!
The Stoneridge Partners Home Health Index (HH Index) is updated monthly and measures the performance of these two publicly traded home health companies, all listed on the NASDAQ:
- LHC Group (LHCG)
- Amedisys (AMED)
Here are the results of the stock prices for the past two years:
||1 mos change
Although we track the performance of Addus, they are not included in our HH Index because very little of their revenue comes from Medicare.
Enterprise Value (EV)
|EV (in M)
|HH Index Total
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
|HH Index Average*
The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these six publicly traded post-acute care companies, all listed on the NASDAQ:
- LHC Group (LHCG)
- Amedisys (AMED)
- Addus (ADUS)
- The Pennant Group, Inc. (PNTG)
- Encompass Health (EHC)
- Brookdale Senior Living Inc. (BKD)
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Capital IQ. Enterprise value is defined as market cap plus debt, minority interest and preferred shares, minus total cash and cash equivalents. EBITDA is calculated using methodology which may differ from that used by a company for its reporting. (Home Health Index August 2022 | Stoneridge Partners)
SOLD Across the Country
- Ohio-headquartered CommuniCare Health Services recently took over operations of hospice and home health provider Stonerise, expanding the company’s reach in its home state as well as West Virginia
SOLD!!! By Stoneridge
- Stoneridge Partners is proud to announce the successful sale of a behavioral health agency in Arizona
View all of our closed transactions on our website
Home Health Index August 2022 | Stoneridge Partners
From Joe Lynch, Publisher of “Home Health Index.” Joe can be reached at [email protected] or 800-218-3944. Previous editions of this monthly newsletter can be searched for at the bottom of the home page of the Home Health Index. Links to Google Finance: Amedisys | LHC Group