Specialist
Former director at Amedisys Inc
Agenda
- Key home health industry trends and developments, highlighting Amedisys’ (NASDAQ: AMED) competitive differentiation vs Kindred and LHC Group (NASDAQ: LHCG)
- Amedisys’ announced Contessa Health acquisition and SNF (skilled nursing facilities)-at-home pilot launch
- Shift to home care and telehealth utilisation – challenges, advantages and reimbursement dynamics
- Amedisys’ hospice and personal care segments, including costs and expenses trends and revenue outlook
- H1 2022 outlook – leadership transition, consolidation trends and growth prospects
Questions
1.
What’s your view of Amedisys’ home health segment and this market generally? What’s the market growth outlook? Presumably there are some positive demographic tailwinds. How is the competitive landscape playing out with any potential for market share gains? Is there anything to add about the overall reimbursement and regulatory environment?
2.
What’s the impact on the competitive landscape if the direction seems to be, as you said, agencies needing to be on top of their game with every last detail? Would that create more pressure for a shake-out of the smaller players in this fragmented industry and allow for market share gains by the dominant national players?
3.
What are your overall thoughts on Amedisys’ announced acquisition of Contessa Health in June 2021?
4.
What is your overview of Amedisys’ home health franchise, including commentary on the pandemic impact? Where do you believe same-facility admissions growth can return to in a more normalised post-pandemic operating environment?
5.
When I think of home health, I think we have some really strong macro trends, to your earlier point about it being a huge industry with strong growth likely to continue. How do you figure out potential winners and losers in the competitive landscape? It’s very hard as an analyst at a hedge fund to figure out the average morale of the workforce. What’s your outlook on this tight labour market, the nursing shortages and intense competition for staff? How long could it last and how disruptive could it be with respect to performance surprises? Can you speak to the workforce morale?
6.
What’s your take on the SNF [skilled nursing facilities]-at-home pilot Amedisys launched in May 2021? The programme is about positioning the company for the shift to post-acute care of very sick patients and moving those from the hospital to the SNF setting to the home setting. How are you assessing this strategy and the way the company is positioning itself to succeed with this migration?
7.
What’s your assessment of the surprise on the behavioural-change assumptions that occurred? I think ultimately the final rule was fine – it was up 3.2%, but this was supposed to be budget-neutral. When some of these behavioural-change assumptions in the preliminary rule were made, it led to a 4.4% rate cut – this was before the final rule. What’s your thought process and outlook for where reimbursement will generally be coming out of CMS in home health?
8.
What’s your assessment of Amedisys’ hospice segment and the respective cost and expenses, focusing on trend lines?
9.
Does some of the overhead cost, when you have ADC [average daily census] down, somehow seep into the average cost per day going up more than the inflation trend line or salary and wages and benefits increases? Is there some implication that when occupancy goes down, the cost per service rises because you’re apportioning more overhead expenses to fewer patients?
10.
Amedisys’ hospice revenue per day was up at 4%, the cost of service was up 8.6%, which isn’t a good trend for the company. Where might this normalise as we move into a post-pandemic operating environment, where should these things even out? I’m really asking about the operating environment, the tight labour markets, the supply disruptions and wage inflation. Are we going to be in a longer-term environment where cost of service runs ahead of the revenue increases, or could it be a quicker reversion? How is that all going to play out?
11.
What are your thoughts on Amedisys’ personal care enterprise overall? Personal care is a very small part of the overall business – it only generated about USD 16m of revenue.
12.
Amedisys announced earlier this month a leadership transition – Chris Gerard, the current President and COO will become CEO, effective 15 April 2022. Paul Kusserow will continue to serve as Chairman of the Board, so he’s transitioning out of the CEO role, but certainly not leaving the company. What are your thoughts on this transition? What can we expect under Chris’s new leadership and vision?
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