Enhabit(EHAB)2024-08-12 05:29Financial Data and Key Metrics Changes - Consolidated net revenue for Q2 2024 was 1.7 million or 0.6% year-over-year [13] - Consolidated adjusted EBITDA increased by 25.2 million [13] - Home Health segment revenue declined by 1.9 million or 3.9% year-over-year due to increased Medicare reimbursement rates [14] - Cost per visit in Home Health decreased by 2.2% year-over-year, contributing to adjusted EBITDA growth [13] Business Line Data and Key Metrics Changes - Home Health segment saw total admissions growth of 6.4% year-over-year, driven by a 25.2% increase in non-Medicare admissions [13] - The percentage of non-Medicare visits in payer innovation contracts rose from 6% in Q1 2023 to 43% in Q2 2024 [7] - Hospice average daily census grew 2.7% year-over-year, with sequential growth each month since January 2024 [14] Market Data and Key Metrics Changes - The leverage ratio decreased to 5.1x, down from 5.4x at year-end 2023, indicating improved financial stability [15] - Available liquidity was approximately 29 million in cash [15] Company Strategy and Development Direction - The company is focusing on payer innovation strategies to improve revenue and admissions, particularly in non-Medicare segments [7] - A commitment to advocacy efforts against proposed cuts in home health payments is emphasized, with ongoing engagement with trade associations [6] - The company plans to continue opening new locations as part of its de novo strategy, targeting 10 new openings per year [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in long-term growth potential, citing demographic trends and the cost-effectiveness of home care [17] - The company anticipates mid to high single-digit growth in home health admissions and hospice volumes over the next three years [17] - Management acknowledged challenges in Medicare fee-for-service admissions but is implementing strategies to improve performance [19][33] Other Important Information - The CFO announced plans to step down, with gratitude expressed for her contributions to the company [12] - The company has successfully eliminated contract labor, which is expected to enhance productivity and reduce costs [11] Q&A Session Summary Question: How is the company strategizing to turn Medicare fee-for-service admissions around? - The strategy focuses on building payer innovation and contracts, with a third of branches showing growth in fee-for-service business [19] Question: How much room is there to drive down cost per visit? - The company is working on productivity and optimization, with the elimination of contract labor expected to yield full benefits by January 2025 [21] Question: What is the impact of the United contract termination on revenue? - The termination is not expected to significantly impact guidance as the company has been in negotiations and has other agreements in place [32] Question: What actions are being taken to grow the Medicare business? - The company is analyzing referral sources and adjusting strategies based on payer mix shifts to improve Medicare volumes [33] Question: What is the same-store census growth for Hospice? - Same-store average daily census growth was reported at 1.2% positive [34]