February was a noteworthy month for the companies that make up both the Stoneridge Home Health Index (HHI) and the Post-Acute Index (PAI).

LHC Group was officially delisted from the Nasdaq when UnitedHealth Group’s (NYSE: UNH) acquisition of it was finalized. Over the next year, LHC Group will be embedded into the Optum powerhouse, the health care services segment of UnitedHealth Group.

In July of 2005, LHC Group began its run on the public market at close to $18 per share. It left ceremoniously at $170 per share. And while LHC Group is officially out the door, new faces have joined its old peers on the indices.

“LHC Group is just the latest example of a large managed care player acquiring home-based care capabilities, just as Humana did with Kindred at Home,” says Ben Bogan, Partner and Managing Director at Stoneridge Partners. “That is of note itself, of course. What will be interesting to see is how that affects those that remain on the public market moving forward.”

The HHI and PAI were both down significantly month over month, though that was mostly attributable to LHC Group’s exit, which marks a new era for each.

Home Health Index

While one home health company is now gone from the HHI, another has been added in the past year.

Enhabit Inc. (NYSE: EHAB) — the home health and hospice spinoff of Encompass Health Corporation (NYSE: EHC) — has been listed for less than a year, but is already battle-tested.

Instead of immediately entering into growth mode, Enhabit leaders are first trying to navigate choppy waters.

“I don’t want to say that acquisitions are off the table,” Enhabit CFO Crissy Carlisle said on the company’s fourth-quarter earnings call. “I just want to say that we’re going to be very disciplined.”

Those choppy waters are mostly due to a shifting payer mix. The company is trying to get more — and better — contracts with Medicare Advantage (MA) plans, as the markets it operates gain more MA beneficiaries.

Specifically, MA enrollees have increased by 11% in Enhabit’s markets, while Medicare fee-for-service enrollees have decreased by 4%, Enhabit CEO Barb Jacobsmeyer said on the fourth-quarter earnings call.

“All in all, we estimate we have approximately $40 million of adjusted EBITDA headwinds to overcome in 2023,” Carlisle said.

Enhabit’s stock price stayed steady month over month, while Amedisys Inc. (Nasdaq: AMED) saw a 5.64% decrease.

Post-Acute Care Index

Like Enhabit, Aveanna Healthcare Holdings Inc. (Nasdaq: AVAH) held steady month over month.

Addus Homecare Corporation (Nasdaq: ADUS), on the other hand, was up 1% month over month. The bright spot in February was The Pennant Group (Nasdaq: PNTG), up 16% month over month.

Despite issues with staffing turnover, Pennant has succeeded in growing its home health segment of late. For instance, home health and hospice revenue was $90.7 million in the fourth quarter, a 16.4% year-over-year increase for Pennant.

Its turnover rate has ticked up by 25% over the past two years, however.

“While we are pleased with the progress, we know we can be much better and see tremendous opportunity to unlock additional value in the coming year,” Pennant President and CEO Brent Guerisoli said on the company’s fourth-quarter earnings call. “We are enhancing our efforts to find, train and develop world-class operational and clinical leaders.”

Like the HHI, the PAI was skewed by the exclusion of LHC Group and the inclusion of new companies, such as Enhabit and Aveanna.

Quote of the Month

“In-home support services are a really popular offering. Nearly a quarter of all the plans are offering in-home support services this year.” – ATI Advisory Principal Tyler Cromer

Read the Full Article Here: MA Plans Continue To Expand Home Care Friendly Supplemental Benefits

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:

*NOTE: LHC Group was officially delisted from the Nasdaq when UnitedHealth Group’s (NYSE: UNH) acquisition of it was finalized. While LHC Group is now gone from the HHI, Enhabit has been added in the past year. The numbers below are reflected as such.

  • Amedisys (AMED)
  • Enhabit (EHAB)

Here are the results of the stock prices for the past two years:

Company 2/28/23 1 mos change YTD change 2/28/22 2/28/21
Amedisys 91.95 -5.64% -4.87% 160.24 253.64
Enhabit 15.35 -0.08% -0.07%
HH Index* 53.65 -60.34% -57.96% 296.41 435.35
S&P 3970.15 -2.75% -2.61% 4370.50 3841.0
Addus 108.64 +1.13% +1.04% 85.04 107.57

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) 2023 2022 2021
Amedisys 3480 5620 8550
Enhabit 1380
HH Index Total 4860 10340 14160
Addus 1820 1460 1630

Enterprise Value (EV), aka Selling Price, as Percent of Revenue

Company 2023 2022 2021
Amedisys 157% 255% 158%
Enhabit 128%
HH Index Average* 143% 236% 343%
Addus 196% 175% 215%

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:

  • Aveanna (AVAH)
  • Amedisys (AMED)
  • Addus (ADUS)
  • The Pennant Group, Inc. (PNTG)
  • Encompass Health (EHC)
  • Enhabit (EHAB)
  • Brookdale Senior Living Inc. (BKD)

This graph displays Post-Acute Care Index performance starting late 2019.

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 March 2023 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Legacy Hospice expanded in Missouri by acquiring Safe Harbor Hospice

View Stoneridge closed transactions on our website

Exclusively Listed For Sale By Stoneridge Partners.

Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.

Non-medical home care franchisee.  $9.6+M in revenue.  50% Medicaid/30% Private Pay/ 14% VA/ 6% Misc.  Experienced management team to stay post-transition.

 Home Care /  Multi-State

Hospice.  45+ ADC.  Rio Grande Valley.  No CAP or regulatory issues.

 Hospice /  Texas

$2M revenue home care agency.  100% private pay.  Primarily non-medical.  Skilled designation, not Medicare-certified.  W-2 caregivers.  Region 8.  Accredited.

 Home Care /  Florida

Profitable private-duty home health agency in Northern Virginia.  $1.5M in revenue.  20+ years in the community.

 Home Health /  Virginia

Profitable home care franchise with consistent sales growth.  Revenue of $1.3M.  Great reputation within the community.

 Home Care /  Iowa

$40M+ home care agency with 20+% AEBITDA.  Primarily private-duty, non-medical (90%).  Medicaid waiver programs.  40% family caregivers.  Multiple locations.

 Home Care /  Pennsylvania

Colorado Springs and surrounding areas.  Opportunity to grow existing small hospice.  Motivated Seller

 Hospice /  Colorado

Medicare-certified home health agency.  Houston/Kingwood area.  Approximately $600k in revenue.  Accredited.

 Home Health /  Texas

I/DD provider offering SCL & FHP services.  $3M in revenue.  Recent rate increase.

 I/DD /  Kentucky

Hospice.  30+ADC.  No CAP or regulatory issues.

 Hospice /  Illinois

Behavioral Health/Suboxone Clinic.  $900k in revenue.  21 years in business with stellar reputation.  Single office, great opportunities for expansion.  All cash paying patient base.

 Behavioral Health /  Kentucky

I/DD residential services.  $11M in revenue.  Highly profitable agency with long-standing reputation.  Community Residential Services (CRS) 4-bed model & Integrated Community Supports (ICS) apartment settings.

 I/DD /  Minnesota

Well established home health agency.  $4M in revenue.  Fully staffed.  Profitable.  Good history of compliance.

 Home Health /  Missouri

Home Health CON in Montgomery County.  Profitable agency generating over $1.3M in revenue.  95%+ Medicare.  Built in marketing relationship and growth potential.

 Home Health /  Maryland

Skilled Home Health & Private Duty. $4.4 million in revenue. 22% census increase over last year. Established over 23 years.

 Home Health /  Florida

Medicare/Medicaid Home Health agency. $8 million in revenue. Long history in the community.

 Home Health /  Oklahoma

86 patient hospice located Northeast of Houston, TX. $4M+ in revenue with 20% + adjusted EBITDA. Full staff in place. Excellent record of compliance.

 Hospice /  Texas

Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.

 Home Health /  Florida

Hospice. 150 ADC. Strong growth. Expertly run with administrative team willing to stay involved. No CAP or regulatory issues.

 Hospice /  Southwest

Mental Health Treatment Center. $1.1M in revenue. Long-established, profitable practice. Full spectrum of medical treatment and therapy services.

 Behavioral Health /  Indiana

Medical Staffing Agency. $4.6M in revenue. Established over 25 years. Excellent rapport with regional hospital network.

 Other /  Kentucky

Medicare home health agency.  Health system relationship.  Rare KY CON opportunity, multiple counties

 Home Health /  Kentucky / Popular

Home health with $8M in revenue.  Medicare/Medicaid-certified.  90+% traditional Medicare/episodic.  Services central Texas and licensed for entire state.  Strong management team in place.

 Home Health /  Texas

Medicare-certified home health agency.  Houston-area.  Minimal census.

 Home Health /  Texas

Medicare-certified home health agency.  $1M+ in revenue.  Long-established agency with excellent community rapport.

 Home Health /  Texas

$19.5M large home care franchisee.  89% Medicaid.  Well-established company operating more than 20 years.  Phenomenal year-over-year revenue growth.

 Home Care /  Illinois / Popular

Home Health Index March 2023 | Stoneridge Partners

From Ben Bogan, Publisher of “Home Health Index.” Ben can be reached at [email protected] or (239) 561-0826, and toll-free at 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