Aveanna Healthcare Holdings Inc. (Nasdaq: AVAH) is bullish on its firm ethos, however continues to be looking for its footing somewhat greater than a yr after going public.
Like many within the area, Aveanna continues to wrestle with labor points and inflation on a macro stage, whereas concurrently having the ability to tout a robust demand for dwelling well being providers.
“The demand for home- and community-based care has by no means been greater,” CEO Tony Unusual stated in the course of the firm’s second-quarter earnings name Thursday. “I’ve been on this enterprise for nearly 35 years and for the primary time, now we have payers — each state governments and managed care organizations — reaching out and asking what may be accomplished to create extra capability. Now we have a ready record for brand spanking new admissions in each department. Now we have a number of examples of how value-based contracts can present advantages to each payer and supplier, however with all that stated, we’re nonetheless in a firefight immediately.”
Primarily based in Atlanta, Aveanna delivers dwelling well being, private-duty providers and hospice care to a broad vary of sufferers in 30 states. Although it’s now closely invested within the senior dwelling well being area, it started as one of many nation’s largest at-home pediatric care suppliers.
The corporate has stated previously that to ensure that it to extend wages, reimbursement charges must come up first within the states it serves. That’s been tricker in some states than others.
Unusual pointed to the COVID-related disruption within the labor market and nationwide inflation as causes for a comparatively weak quarter.
“The labor market associated to our enterprise continues to be difficult throughout all of our enterprise segments, however significantly difficult in our non-public responsibility phase,” Unusual stated.
In keeping with Aveanna, 60% of its private-duty service revenues are obtained by expert nursing providers, which incorporates one LPN at a affected person’s bedside for a 10-12 hour shift. Traditionally, nurses are prepared to work for hourly wages for Aveanna that may be barely beneath these of expert nursing services or different well being care suppliers, Unusual stated.
There’s now been a shift in that development, however Unusual famous there may be extra flexibility in terms of dwelling well being and hospice retention.
“Our dwelling well being and hospice enterprise can also be depending on the power to rent RNs and LPNs, and whereas now we have related constraints associated to the aggressive surroundings, now we have higher flexibility to extend wages given the variable reimbursement fashions,” Unusual stated. “The numerous scarcity of nurses within the U.S. will proceed for the foreseeable future. Nursing colleges are working at capability and the timeline that it’ll take to extend that capability will necessitate wanting elsewhere to extend nursing capability within the U.S.”
Unusual known as on the Biden administration to reverse some immigration insurance policies that may make it simpler for nurses from different nations to come back to the U.S. in search of work as effectively.
Through the second quarter, income for Aveanna noticed a modest enhance of 1.6% from 2021 to 2022, up from $436 million to $443 million.
The general enhance in income was attributable to an $11.3 million enhance in House Well being & Hospice (“HHH”) phase income.
The house well being and hospice was a lone vibrant spot whereas the corporate noticed internet decreases in medical options – $2.8 million lower – and its non-public responsibility providers, a $1.7 million lower, in comparison with a yr in the past.
Regardless of total struggles, COO Jeff Shaner stated there have been a number of vibrant spots in dwelling well being care and hospice, together with a 3.7% enhance in income per go to that was pushed by higher episodic administration and being totally transitioned to Homecare Homebase.
Whereas Shaner painted a rosy image for dwelling well being care sooner or later, he didn’t go up the chance to criticize the U.S. Facilities for Medicare & Medicaid Providers (CMS) for its proposed rule cost minimize.
“That is the mistaken time to be chopping reimbursement to the simplest, highest high quality and patient-preferred well being care setting,” Shaner stated.