The ‘New Normal’ of Post-Acute Care Referrals; Home Health Stocks Down

Home Health Index | 2021 JUNE UPDATE

Post-acute care referrals have rebounded impressively since the country began to emerge from the COVID-19 pandemic – now we have evidence indicating that growth isn’t just an aberration.

According to recent data from CarePort Health, a WellSky company, hospital discharges to post-acute care are trending more toward in-home care. Historically, discharges were evenly split between skilled nursing facilities (SNFs) and home health providers. Now, the split is closer to 60% vs. 40% in favor of home health care.

While SNF volume has continued to lag slightly compared to pre-pandemic baselines, home health volume reached 116% of 2019 levels in March.

“Post-pandemic, we’re seeing hospitals and other referral sources place their confidence in in-home care more frequently than they have in the past,” says Stoneridge Partners President Rich Tinsley. “That’s a positive for home health providers. Pent-up demand, especially as elective procedures return in full, will put home health assets at a premium.”

Home Health and Post-Acute Care Indices

After a steady March and solid April, the Home Health (HHI) and Post-Acute Care (PAI) Indices were each down about 5% in May. Both indices underperformed the S&P 500, which was up less than 1% on a month-over-month basis.

The down month may have been more of a market recalibration than a response to a negative policy or regulatory development. For the most part, post-acute care companies — particularly home health providers — remain buoyed by positive government support systems. That may change by July, when the U.S. Centers for Medicare & Medicaid Services (CMS) is expected to release the next home health proposed payment rule.

Home Health Index

The HHI from Stoneridge Partners follows the stock values of Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG), two of the nation’s largest home health providers.

Baton Rouge, Louisiana-based Amedisys saw its stock drop more than 4% in May compared to the previous month. Similarly, stock for the Lafayette, Louisiana-based LHC Group fell more than 5%. Despite the lackluster May, Amedisys is up more than 34% over the past 12 months, with LHC Group up more than 21% during that time.

Post-Acute Care Index

For a broader look at the post-acute care landscape, the Stoneridge PAI follows Amedisys and LHC Group, plus Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG).

Brentwood, Tennessee-based Brookdale and Birmingham, Alabama-based Encompass Health were the two PAI winners in May.

After consecutive positive months, Encompass Health added to its recent run with a 1% gain in May compared to April. Fresh off the successful acquisition of Frontier, Encompass Health remains in the midst of a possible sale or spinoff for its home health and hospice segment, with no clear-cut suitor yet to emerge.

Brookdale’s stock climbed more than 3% in May over April. Since the start of 2021, Brookdale — a major senior living owner and operator that also runs a large health care services segment — has made substantial progress on its occupancy rates.

“While we can’t tell you the exact timing of the recovery, based on our recent experience, and with dramatically lower construction starts and the accelerating demographic tailwind, I am confident that demand will continue to improve,” CEO Cindy Baier said during the company’s Q1 2021 earnings call at the start of May. “I am very optimistic about our future.”

In contrast to Brookdale and Encompass Health, the final two PAI companies were both down last month. Frisco, Texas-based Addus saw its stock drop more than 9% in May compared to April. Eagle, Idaho-based Pennant experienced an even bumpier May, with its stock down more than 15% on a month-over-month basis.

Addus and Pennant each remain on the M&A hunt, however, with the latter acquiring the assets of Fort Worth, Texas-based Cardiovascular Home Care in early May. Cardiovascular Home Care will operate under the name Custom Care Home Health.

“Having a strong hospice agency and a number of senior living communities in Dallas, we have carefully looked for the right opportunity to add home health services in the DFW area,” Pennant CEO Danny Walker said in a statement. “This acquisition provides a strong platform for our local leaders to better address the needs of the community.”

Quote of the Month

“What’s happening is … all of that stuff you’re doing in the hospital, you’re starting to be able to do in the home. And we think this is part of an overall movement of care moving from hospitals to other settings.” – Eric Dickson, the president and CEO of UMass Memorial Health

Read the Full Article Here: UMass Memorial Health Hopes to Grow Hospital -at-Home Program Tenfold in the Next Year

Articles Featuring Stoneridge

View our quarterly M&A webinars on current valuation trends, deal flow, and pertinent regulatory changes in home health, home care, hospice, ID/DD, and behavioral health industries. Visit the Speaker Series Webinar Library on our website.

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)

This graph compares the percentage of the Home Health Index to the percentage change in the S&P 500 Index going back to 2010.

This is a 12 month trailing chart of the HH Index compared to the actual prices of the individual companies that make up the chart.

This graph displays HH Index performance since 2002.

This graph compares the HH Index to the price of Addus stock (non-Medicare).

(Home Health Index June 2021 | Stoneridge Partners)

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

Company 5/31/21 1 mos change YTD change 5/31/20 5/31/19
Amedisys 258.37 -4.25% -11.92% 192.05 111.88
LHC Group 196.85 -5.48% -7.72% 162.51 112.95
HH Index* 227.61 -4.79% -10.15% 177.28 112.42
S&P 4204.11 +.055% +11.93% 3044.31 2751.98
Addus 96.17 -9.10% -17.87% 98.96 68.01

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) 5/31/21 5/31/20 5/31/19
Amedisys 8670 6400 3840
LHC Group 6050 5440 3980
HH Index Total 14720 11840 7820
Addus 1640 1350 860


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

Company 5/31/21 5/31/20 5/31/19
Amedisys 410% 323% 222%
LHC Group 291% 260% 197%
HH Index Average* 351% 292% 210%
Addus 211% 225% 157%


Multiples of EV/EBITDA

Think of this as selling price as a multiple of EBITDA.

Company 5/31/21 5/31/20 5/31/19
Amedisys 27.23 26.51 21.84
LHC Group 24.04 26.03 20.76
HH Index Average* 25.64 26.27 21.30
Addus 27.82 29.32 21.23

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)

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 June 2021 | Stoneridge Partners)

Recent Transactions From Around The Country

  • Eden Home Health of Bozeman has acquired WEL-Home Health of Bozeman.
  • Murfreesboro-based senior care company National Healthcare Corp. has acquired the remaining interest in Nashville-based hospice and palliative care provider Caris Healthcare.
  • Hospice Source, the leading provider of durable medical equipment dedicated to the hospice market, has acquired Respiratory Therapy Home Care of Bellflower, California.

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; Stoneridge Partners

Posted 7 days ago by Coley M

CHAP accredited private duty business.  $2.8 million projected 2021 revenue.  Workers compensation primary source of revenue.  Regions 9, 10, and 11.

 Home Health /  Florida / 8 views

Posted 4 weeks ago by Brian B

$4 million I/DD provider.  Great reputation and long history of profitability.

 ID/DD /  Kentucky / 38 views

Posted 3 months ago by Jacob L

Full continuum, dual diagnosis substance use disorder treatment center in southwestern US.  $7 million revenue, nearly $2 million EBITDA TTM.  Ten in-patient beds, 28 sober...

 Behavioral Health /  Southwest / 110 views

Posted 3 months ago by Jacob L

Mental health primary - assessment, therapy, evaluation, mostly serving senior community.  Six locations in three southeastern US states.  4,000 unique patients, served annually at 200...

 Behavioral Health / 107 views

Posted 4 months ago by Ben B

$9+ million home care agency.  Non-skilled.  99% private pay/LTC Insurance.  65-75% live-ins.  Accredited.  Multiple locations.  Experienced management team.

 Home Care /  New Jersey / 143 views

Posted 5 months ago by Ted Cohen

$25+ million home health agency.  Medicaid/Medicare-certified.  95%+ Medicaid.  Multiple locations.  Experienced management team.

 Home Health /  Massachusetts / 131 views

Posted 6 months ago by Coley M

Very rare opportunity in a CON state.  Located in Davidson County in Nashville, TN.  2020 revenue in excess of $650,000.

 Home Health /  Tennessee / 194 views

Posted 6 months ago by Luci

Substance use disorder treatment center, PHP, IOP, co-occurring disorders.  2019 EBITDA of $400k. 2020 revenue $1.5 million, over $200k EBITDA TTM.  2021 trending $175k EBITDA...

 Behavioral Health /  Mountain West / 156 views

Posted 7 months ago by Ben B

Non-skilled home care company.  $10+ million in annual revenue.  Predominantly Medicaid.  Highly profitable.  Accredited.  Strong management team in place.

 Home Care /  Northeast / 197 views

Posted 7 months ago by Joe L

$1 million Medicare home health agency in northwest Minnesota.  Well-established.  Diverse referral sources.  Long history of excellent care.

 Home Health /  Minnesota / 155 views

Posted 8 months ago by Ben B

Non-skilled licensed home care organization.  Approximately $2 million in annual revenue.  Strong management team in place.  Southern California.

 Home Care /  California / 219 views

Posted 9 months ago by Brian B

$10 million Medicaid personal care provider.  Large consumer-direct component.  History of steady growth.

 Home Care /  Minnesota / 277 views

Posted 9 months ago by Brian H

$50 million ID/DD platform opportunity.  Multi-state, Midwest.  Tenured management team to stay in place.  Double digit year over year organic growth.  Significant future opportunities for...

 ID/DD /  Midwest / 289 views

Posted 10 months ago by Joe L

Clean and accredited hospice provider number in the coveted San Antonio marketplace.  Current license is valid until the end of May 2022.

 Hospice /  Texas / 293 views

Posted 10 months ago by Brian H

$8 million Midwest ID/DD agency.  Highly profitable.  Consistent staff and clients.

 ID/DD /  Midwest / 298 views

Posted 10 months ago by Partners

$2.1 million revenue.  Dallas/Ft. Worth based Medicaid pediatric therapy business.  16% EBITDA margin.  More than 300 patients.  Also services San Antonio and surrounding areas.

 Home Health /  Texas / 271 views

Posted 11 months ago by Partners

$12 million Medicaid home care business.  Experienced management team in place.  Strong financials, long-term consistent growth.  EBITDA over $1 million.

 Home Care /  Pennsylvania / 309 views

Posted 1 year ago by Jacob L

Three locations in southeastern US.  Real estate is also for sale.  Residential, PHP, IOP and sober living programs; detox is outsourced through BioCore.  More than...

 Behavioral Health /  Southeast / 380 views

Posted 1 year ago by Partners

$4.9 million Medicare home health agency located in Phoenix, Arizona.  Showing strong year over year revenue growth since 2018.  Diverse referral sources, well run with...

 Home Health /  Arizona / 409 views

Posted 1 year ago by Partners

$5 million Midwest-based ABA provider. Day supports and counseling. Highly profitable and respected. CARF accredited. Contracted with state and insurance companies.

 Behavioral Health /  Midwest / 427 views

Posted 1 year ago by Coley M

$1.5 million private duty home health agency in eastern Michigan. Profitable and well-positioned for additional growth. Self-sufficient staff in place. 82 long-term clients.

 Home Health /  Michigan / 399 views

Posted 1 year ago by Jacob L

New software application helping build social connections among patients in recovery and giving them increased access to therapists. Potential investment opportunity. Facilitates total successful recovery...

 Other / 380 views

Posted 1 year ago by Ben B

Hospice with $3.5 million in annual revenue. Accredited. No cap or regulatory issues.

 Hospice /  Texas / 464 views

Posted 1 year ago by Ted Cohen

Home health agency and adult day care center with $12+ million in annual revenue. Home health represents 85% of revenue while adult day represents 15%...

 Home Health /  South Atlantic / 422 views

Posted 1 year ago by Jacob L

Treatment center with 28 beds, intensive outpatient program capacity of 40, full continuum of substance use disorder services and dual diagnosis treatment capability. JCAHO accreditation...

 Behavioral Health /  Texas / 441 views

Posted 1 year ago by Brian H

$1 million ID/DD agency with real estate. Long-term client base, additional growth potential and strong margins.

 ID/DD /  North Carolina / 373 views

Posted 1 year ago by Ben B

$2.5 million New Mexico home health agency. 87% Medicare. Long history in the community and existing staff in place.

 Home Health /  New Mexico / 402 views

Posted 1 year ago by Brian H

$2 million ID/DD agency in the Detroit area. Profitable service provider with existing management team in place.

 Michigan / 382 views

Posted 1 year ago by Ted Cohen

Medicare and Medicaid certified home health agency.  $16.5 million in annual revenue with continued growth. 90%+ Medicaid.   Strong management in place. Accredited.

 Home Health /  Massachusetts / 428 views

Posted 1 year ago by Brian H

ID/DD service provider with $1 million in revenue. Residential and day services offered, located in Atlanta suburb.

 ID/DD /  Georgia / 413 views

Home Health Index June 2021 | Stoneridge Partners

From Rich Tinsley, Publisher of “Home Health Index.” Rich can be reached at rich@stoneridgepartners.com 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