Home Health Index August Update
In August, companies on the post-acute and home health indices generally fared very well, with only one, Enhabit Inc., stumbling significantly.
Home health providers are working towards better payer strategies in Medicare Advantage (MA), as the Centers for Medicare & Medicaid Services (CMS) continue to discuss cutting core home health payments. With MA penetration expanding, providers no longer have the sturdy fee-for-service payments to fall back on. Thus, they are hunting for the right payer partners, and in doing so, they’re hoping to get payments for MA members closer to that of traditional Medicare payers.
This is not an easy task, particularly as MA plans face a turbulent payment environment of their own.
“MA has steadily become a much bigger revenue source for home health providers over the last decade or so,” says Joe Lynch, Partner and Managing Director at Stoneridge Partners. “Those plans tend to pay from 20% to 40% less than traditional Medicare for home health services, and providers have to find a way to make up that gap.”
The home health index was down 1.7% in August, while the post-acute care index was up 5.37%. Comparatively, the S&P was up 2.48% month over month.
Home Health Index
Amedisys Inc. (Nasdaq: AMED) hasn’t moved much over the past two months, as its shareholders await the possible closing of the UnitedHealth Group (NYSE: UNH) deal.
In August, Amedisys stock stayed steady at about $98 per share, which is $3 under the $101 per share agreed-upon purchase price.
The general belief is still that UnitedHealth Group’s Optum will finalize its acquisition of Amedisys by the end of the year.
Enhabit Inc. (NYSE: EHAB) stock, on the other hand, fell significantly. The company’s stock has been volatile over the last few months. It was down over 17% in August. In July, it was up 14%.
In early August, the company announced that it had terminated its contract with UnitedHealthcare, the largest MA payer in the country.
In September, the company offered further details on why it came to that decision.
“It’s important to remember that the reason we created our payer innovation strategy, about two years ago, was because at that time we had United as a large payer and then a few regional smaller contracts that had come along with acquisitions over the years,” Enhabit CEO Barb Jacobsmeyer said recently at the 2024 Wells Fargo Healthcare Conference. “Those combined contracts had us at about a 40% discount to Medicare. Obviously, that’s not sustainable. We started the payer innovation strategy to have more and better contracts.”
Walking away from a large payer like UnitedHealthcare is a tough sell in the near-term, but long term, the decision likely makes sense. Jacobsmeyer has shared that the company’s better MA contracts are now either at, or around 15% below, fee-for-service rates.
That’s compared to the UnitedHealthcare contract, which, as Jacobsmeyer mentioned, was 40% below fee-for-service rates.
Post-Acute Care Index
For the second month in a row, both Aveanna Healthcare Holdings (Nasdaq: AVAH) and The Pennant Group (Nasdaq: PNTG) made significant gains, up 34% and nearly 15%, respectively.
In July, Aveanna was up over 50% and Pennant was up by 28%.
Aveanna has been right sizing its home health business over the last year, but its personal care services business has been performing well consistently.
Like Enhabit, Aveanna has been focusing on negotiating better deals with payers in both segments over the last couple of years. That effort is finally leading to some wins.
“Our ongoing enhanced payer partnerships allow us to provide more care to a greater number of patients through investment in our caregivers,” Aveanna CEO Jeff Shaner said during the company’s second-quarter call. “The key to our current and future success continues to be our dedicated team of Aveanna leaders and caregivers who consistently deliver exceptional care daily.”
Pennant leaders, meanwhile, said that the company’s home health and hospice growth was significantly ahead of expectations on their recent second-quarter earnings call.
“We’re significantly ahead of where we expected to grow,” Pennant President and COO John Gochnour said on the call. “Our hospice census has increased by 30%, home health census by nearly 30%; and senior living business revenue is up by 16%. It has been an outstanding start to the year. Our trends remain strong, and our focus is on continued execution.”
Addus Homecare Corp. (Nasdaq: ADUS) was up by 9.6% in August, and BrightSpring Health Services (Nasdaq: BTSG) was up by 1.29%.
Quote of the Month
“Hospice is in a period of disruption. We’re going to be paid differently. It’s billing differently, or how you’re providing care may be different under a certain model. We’re going to have to figure out how to be ready to adapt, to be successful in any payment model and be able to be in multiple payment models — whether it’s an [Accountable Care Organization (ACO)] , Medicare Advantage or a different structure.” – Kristen Yntema, President & CEO, AuthoraCare Collective
Read the Full Article Here: Hospice Executives: Value-Based Care, Regulation Will Shape Hospices’ Future
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:
- Amedisys (AMED)
- Enhabit (EHAB)
Here are the results of the stock prices for the past two years:
Company | 8/31/24 | 1 mos change | YTD change | 8/31/23 | 8/31/22 |
Amedisys | 98.01 | -0.04% | +3.10% | 93.75 | 118.45 |
Enhabit | 8.44 | -17.58% | -18.45% | 12.81 | |
HH Index* | 53.23 | -1.70% | +0.99% | 53.28 | 139.96 |
S&P | 5659.50 | +2.48% | +18.65% | 4507.66 | 3955 |
Enterprise Value (EV)
EV (in M) | 2024 | 2023 | 2022 |
Amedisys | 3530 | 3450 | 4450 |
Enhabit | 986.89 | 1220 | – |
HH Index Total | 4516.89 | 4670 | 10330 |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
Company | 2024 | 2023 | 2022 |
Amedisys | 154% | 155% | 201% |
Enhabit | 95% | 115% | – |
HH Index Average* | 125% | 135% | 229% |
The Stoneridge Partners Post-Acute Care Index is updated monthly and measures the performance of these seven publicly traded post-acute care companies, all listed on the NASDAQ:
- Aveanna (AVAH)
- Amedisys (AMED)
- Addus (ADUS)
- The Pennant Group, Inc. (PNTG)
- Enhabit (EHAB)
- Brookdale Senior Living Inc. (BKD)
- Brightspring (BTSG)
Here are the results of the Post-Acute stock prices for the past two years:
Company | 8/31/24 | 1 mos change | YTD change | 8/31/23 | 8/31/22 |
---|---|---|---|---|---|
Amedisys | 98.01 | -0.04% | +3.10% | 93.75 | 118.45 |
Addus | 133.01 | +9.60% | +43.25% | 87.70 | 89.22 |
Pennant | 34.26 | +14.93% | +146.12% | 11.98 | 15.67 |
Brookdale | 7.11 | -8.02% | +22.16% | 4.25 | 4.40 |
Enhabit | 8.44 | -17.58% | -18.45% | 12.81 | 16.60 |
Brightspring
Aveanna |
12.55
5.65 |
+1.29%
+34.20% |
–
+110.82% |
–
1.44 |
–
1.82 |
Enterprise Value (EV)
EV (in M) | 2024 | 2023 | 2022 |
---|---|---|---|
Amedisys | 3530 | 3450 | 4450 |
Addus | 2280 | 1470 | 1570 |
Pennant | 1380 | 677 | 767 |
Brookdale | 5770 | 5260 | 5550 |
Enhabit | 987 | 1220 | – |
Brightspring
Aveanna |
5040
2380 |
–
1590 |
–
– |
Enterprise Value (EV), aka Selling Price, as Percent of Revenue
Company | 2024 | 2023 | 2022 |
---|---|---|---|
Amedisys | 154% | 155% | 201% |
Addus | 205% | 147% | 174% |
Pennant | 226% | 135% | 169% |
Brookdale | 188% | 182% | 210% |
Enhabit | 95% | 115% | – |
Brightspring
Aveanna |
51%
122% |
–
87% |
–
– |
This graph displays 24 months of Post-Acute Care Index performance.
The above calculations are based on selling price being defined as Enterprise Value (EV), with data provided by Yahoo Finance. 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 2024 | Stoneridge Partners)
Recent Transactions From Around The Country
- Agape Care Group, a portfolio company of Ridgemont Equity Partners and the premier provider of hospice and palliative care across nine states, acquired select Crossroads Hospice locations in Oklahoma, Missouri, Kansas and Georgia.
- Advance Home Health Care LLC acquired Mobile Nursing Services LTD.
- Help at Home, a national provider of in-home personal care services, acquired several Georgia-based homecare organizations: Care By Your Side, One Care Health and AAMedcare.
SOLD by Stoneridge!!!
- Stoneridge Partners is proud to announce the successful sale of a Florida home care agency.
- Stoneridge Partners, Ben Bogan and Ted Cohen, provided sell side M&A advisory services in the Community Based Care (CBC) and Hand ‘n Heart transaction. Read more here
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.
Do you know of any acquisitions that have taken place? We are interested in your comments. Contact us at Stoneridge Partners.
Medicaid/Medicare home health & home care company. $2.5M in revenue. Well-established. Stable revenue. Profitable year-over-year.
I/DD provider. $2.6M+ in revenue with 19% EBITDA margins. CARF accredited, long history in the community. Mix of county contracts and Medicaid payors. Consistently recognized...
Medicare-certified home health agency. District 7. Census of approximately 30 patients. Accredited.
Designer/Distributor of innovative, therapeutic, health and wellness personal products. $1.5M+ in revenue. Launched in the US and UK, now launching into the EU. Nearly 7,000...
Staffing Agency licensed to provide staffing services in 6 states. $ 2.4M+ in LTM revenue. Significant long-term contracts with providers in the Care-At-Home space, Health...
Homecare agency. $6.5M+ in revenue. Located on Long Island. Blend of Private Duty & Medicaid patients.
Large home care franchisee. $26M+ in revenue. 89% Medicaid. Well-established company operating over 20 years. Phenomenal year-over-year revenue growth.
Maricopa County hospice. 40+ ADC. CHAP accredited. No CAP or regulatory issues.
Growing ABA (Autism) therapy clinic established in 2020. $1.6M in revenue. Market demand heavily outweighs supply in the area for ABA therapy.
Well-established private pay agency in the Denver area. $ 2M in revenue. Profitable. Diverse list of referral sources.
Eastern Oklahoma home health agency. $2M in revenue with 15%+ AEBITDA. 70% Medicare/30% VA.
Northeast Oklahoma home health company. $1.7M of revenue and profitable. 95% traditional Medicare. Long history in the area.
Special education and tutorial provider with limited access contracts. $3M in revenue. Strong relationships with county school programs. Long history in the community, close to...
Growing ABA (Autism) therapy clinic established in 2016. $ 3.1M in revenue. Huge Opportunities for expansion in a thriving market. BHCOE (Behavioral Health Center of...
Medicare-certified home health agency. $1.7M in revenue. AHCA accredited. Broward County (Region 10)
Growing Medicare home health and hospice organization. $17M+ in revenue. Over 25 years in business. A well-established leader in the market.
Medicare-certified home health agency. Region 7, including sought-after Orange county (Orlando). Minimal census.
ABA (Autism) therapy. $1M in revenue. Facility-based. Profitable business with demand exceeding supply.
$8+ million in revenue. Long-established Ohio home health and hospice. Extensive history of clinical excellence. CHAP accredited. Fully staffed
Medicare-certified home health agency. $1.3M in revenue. Accredited. 90%+ VA. North Orange and LA counties.
Behavioral health services. $25+M in revenue. Residential care facilities, inpatient psych/outpatient mental health support services, and counseling for adults and elderly patients. Platform opportunity with...
Skilled home health agency. Servicing Central Florida for over 20 years. Census approximately 35.
Houston-based home health company. $7+M in revenue. Profitable. Well established within the community. Showing positive growth trends.
Occupational therapy practice with 2 offices in Southern California. Hand and upper extremity specialists. 20-plus years in the community. Strong referral relationships. Management and staff...
Hospice. 100+ ADC. Accredited. No CAP or regulatory issues.
$5M in revenue. Located in Northern/Richmond VA. Health system-owned Medicare home health and hospice. Growing organization.
Home care agency. $30M+ in revenue. 95% Medicaid. Platform opportunity.
Hospice. 45+ ADC. Rio Grande Valley. No CAP or regulatory issues.
Profitable home care franchise with consistent sales growth. Revenue of $1.3M. Great reputation within the community.
$40M+ home care agency with 20+% AEBITDA. Primarily private-duty, non-medical (90%). Medicaid waiver programs. 40% family caregivers. Multiple locations.
Home Care / Pennsylvania / Popular
Medicare-certified home health agency. District 3. Approximately $700k in revenue. Accredited.
Home Health / Florida / Popular
Home Health Index August 2024 | Stoneridge Partners
From Joe Lynch, Publisher of “Home Health Index.” Joe 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.
Joe Lynch, Partner and Managing Director at Stoneridge Partners brings over 30 years of healthcare expertise, specializing in mergers and acquisitions, finance, regulatory compliance, and business development. After earning his Business Administration degree from the University of Mississippi, Joe helped expand OrNda Healthcorp’s (now Tenet’s) home health care division.
In 1997, Joe founded Reachout Home Care, a Medicare and private duty agency, which he grew into three operating companies in Dallas and Houston before selling to Humana in 2014 using Stoneridge Partners. After the sale of his own company Joe joined Stoneridge, and for the last ten years has used his industry knowledge to help other owners list their companies and bring them to a successful close. With a proven track record in operations and M&A, Joe brings unmatched experience and
professionalism to every transaction.
For more information, please contact Joe directly at 214-394-0070 or [email protected]. All communications are confidential.