Post-Acute Care Stocks Continue Downturn as Staffing Shortages Persist

The demand for home health services is still skyrocketing, but staffing remains a significant challenge for operators. And as vaccine mandates begin to take effect across the country, their ultimate impact on home health staffing levels is yet unknown.

The Biden administration announced a six-point COVID-19 plan in September that included mandatory vaccinations for all health care providers who receive reimbursement from Medicare and/or Medicaid; an Interim Final Rule and comment period is expected to be announced this month. Meanwhile, healthcare companies are ramping up their push for employee vaccination, and in some places like New York, state and local mandates have already been implemented with better than expected results – so far.

“It differs based on geographic location, but home health providers we’ve talked to have anywhere from 60% to 80% of their staff vaccinated,” said Stoneridge Partners President and CEO Rich Tinsley. “But we know operators are already dealing with staff shortages, and if a large number of workers refuse to get vaccinated and leave the industry, that will force agencies to decline referrals. There’s just such a supply and demand imbalance right now.”

Home Health and Post-Acute Care Indices

The Stoneridge Partners Home Health (HHI) and Post-Acute Care (PAI) Indices each continued their recent downturn in September.

With ongoing staffing woes plaguing the industry, the HHI fell by more than 17% in September as compared to August. The PAI fared better but still came in negative, down almost 4% on a month-over-month basis.

In comparison, the S&P 500 was down nearly 5% in September as compared to August.

Home Health Index

The Stoneridge Partners HHI tracks stock values for Amedisys, Inc. (Nasdaq: AMED) and LHC Group, Inc. (Nasdaq: LHCG). Baton Rouge, Louisiana-based Amedisys saw its stock drop almost 19% in September, while stocks for Lafayette, Louisiana-based LHC Group dropped nearly 16%, with its per share pricing on a similar trajectory.

“Without a doubt, the public companies are navigating the same disruption that all health care providers are,” Tinsley says. “Even so, they remain active from an M&A perspective.”

Amedisys announced in September that it had signed a definitive agreement to acquire regulatory assets allowing it to establish home health centers in the Charlotte and Raleigh markets in North Carolina. LHC Group also announced agreements to purchase a home health agency and a hospice provider in Virginia last month.

Post-Acute Care Index

The Stoneridge Partners PAI includes stock results for Amedisys and LHC Group, as well as Addus HomeCare Corporation (Nasdaq: ADUS), Brookdale Senior Living Inc. (NYSE: BKD), Encompass Health Corp. (NYSE: EHC) and The Pennant Group, Inc. (Nasdaq: PNTG).

Frisco, Texas-based Addus’ stock values fell more than 11% in September as compared to August, and Brookdale, headquartered in Brentwood, Tennessee, saw its stock drop almost 14% on a month-over-month basis. Meanwhile, Birmingham, Alabama-based Encompass Health stocks dipped by more than 4% and Eagle, Idaho-based Pennant stocks fell just more than 8%.

In another sign that home health transaction activity hasn’t been slowed by the industry’s volatility in the stock market, LHC Group announced in September that it would acquire home health and hospice agencies in 22 states from the recently formed venture between Brookdale and HCA Healthcare (NYSE: HCA).

“That was a good deal for LHC Group because it expands their footprint,” Tinsley said. “It also works for HCA, because they’re focused on operating home health and hospice agencies only where they have an existing hospital. For Brookdale, this gives them a little more liquidity. So they described the transaction as a true ‘win-win-win,’ so to speak.”

Quote of the Month

“We are living in unprecedented times, and there is a mental health tsunami underway with a dramatic increase in mental health challenges such as anxiety, depression, suicidality, alcohol and substance abuse and relationship distress. We need to be hyper vigilant to these challenges and find strategies to address them with openness, respect and compassion—especially at work, where individuals face even more layers of stress.” – Dr. Thomas Plante, a professor of psychology at Santa Clara University and clinical professor of psychiatry and behavioral sciences at Stanford University School of Medicine.

Read the Full Article Here: World Mental Health Day Has Huge Implications For Workplace Leaders

Articles Featuring Stoneridge

Rich Tinsley, President and CEO of Stoneridge was featured in Home Health Care News: I Haven’t Seen Anything Cool Off; Home Health Market Stays Hot Heading into 2022.

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 2015.

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

(Home Health Index October 2021 | Stoneridge Partners)

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

Company 9/30/21 1 mos change YTD change 9/30/20 9/30/19
Amedisys 149.10 -18.72% -49.17% 236.43 131.36
LHC Group 156.91 -15.98% -26.44% 212.56 114.28
HH Index* 153.01 -17.34% -39.60% 224.50 122.82
S&P 4307.54 -4.76% +14.68% 3380.75 2983.69
Addus 79.75 -11.31% -31.89% 94.51 79.19

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) 9/30/21 9/30/20 9/30/19
Amedisys 5580 7610 4390
LHC Group 5250 6160 3980
HH Index Total 10830 13770 8370
Addus 1480 1330 1070


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

Company 9/30/21 9/30/20 9/30/19
Amedisys 263% 386% 242%
LHC Group 246% 299% 195%
HH Index Average* 255% 343% 219%
Addus 182% 181% 188%


Multiples of EV/EBITDA

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

Company 9/30/21 9/30/20 9/30/19
Amedisys 15.11 31.44 24.41
LHC Group 22.10 25.44 19.57
HH Index Average* 18.61 28.44 21.99
Addus 22.03 23.98 25.72

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 October 2021 | Stoneridge Partners)

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

Medicare-certified home health agency.  Minimal census.  Region 6.  Accredited.

 Home Health /  Texas

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

 Home Care /  Connecticut

Clean and accredited Medicare provider number.  Zero deficiencies.

 Home Health /  Connecticut

Joint Commission-accredited psychiatric treatment center.  Residential, PHP, IOP, OP and home health services.  National referral base; reputation for excellence, innovation.  $3M EBITDA on $7M revenue...

 Behavioral Health /  Midwest

Central Ohio based home health company with private pay.  $2.3 million in revenue.  13.5% EBITDA.  Strong growth trends, full staff in place.

 Home Health /  Ohio

Large home care franchisee.  $6.5 million in revenue.  Private duty.  Attractive market with great growth potential.

 Home Care /  Florida

Non-medical home care franchisor.  Platform opportunity with national footprint.  Systemwide revenues more than $12 million.  Franchise locations in 16 states.

 Home Care /  Texas

$2+ million private pay.  Profitable with great reputation.

 Home Health /  Pennsylvania

Profitable hospice agency with $600,000 in revenue.  Ready to grow with full complement of staff in place.

 Hospice /  Pennsylvania

Medicare/Medicaid agency with $3.5 million in revenue.  Established 20+ years.  Great reputation in eastern Michigan.

 Michigan

$1.5 million home health agency.  Approximately 70% traditional Medicare.  Single location.  Reputation for clinical excellence.  Experienced administrative team.

 Home Health /  Ohio

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

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

 ID/DD /  Kentucky

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

 Home Health /  Massachusetts

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

 Home Health /  Tennessee

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

 Home Care /  Northeast

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

 Home Health /  Minnesota

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

 Home Care /  California

$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

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

 Hospice /  Texas

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

 ID/DD /  Midwest

$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

$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

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

 Hospice /  Texas

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

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

 ID/DD /  North Carolina

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

 Home Health /  New Mexico

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

 Michigan

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

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

 ID/DD /  Georgia

Home Health Index September 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