Home Health Index Hits a Seven-Month Low

Stoneridge Partners announced that the home health index, which is comprised of the four public home health care agencies, hit a seven-month low following CMS’ June 27 announcement of proposed Medicare home health payment rates for 2014. The proposed would set rebasing at the maximum reduction of 3.5% for each of the next four years.

Although this is just a proposal it sent a shock wave to the stocks in our Stoneridge Partners Home Health Index, causing the index to drop over 10% in just a few hours, something Stoneridge Partners noted they have not seen in their 10 years of tracking.

Until the announcement, the HH Index had been up, however it’s now down about 7% for the month and 5% YTD. On the good news front, the index is still up from a year ago.

Here are the results for the HH Index:

Company Price 6/30/13 Change in %  Month Change in % YTD Price 6/30/12 Change in % Year
Almost Family 19.09 -3.44% -5.77% 22.34 -14.55%
Amedisys 11.16 -5.84% +2.56% 12.45 -6.83%
Gentiva 9.96 -6.57% -0.90% 6.93 +43.72%
LHC Group 19.58 -10.96% -10.14% 16.96 +15.45%
Home Health Index 15.06 -6.97% -5.01% 14.67 +2.64%
S&P 500 1606.28 -1.50% +12.63% 1362.18 +17.92%
Addus 19.74 +9.73% +176.08% 4.91 +302.04%

All of these stocks were down in June, with LHC Group leading. However when looking back one year it becomes hard to generalize.  Gentiva is up over 40% from one year ago, while Almost Family and Amedisys are both down.

The high for our HH Index was set in September 2008 at 41.75, and then, within five months it dropped to $21. It now sits at about $15, a seven-month low. As a comparison, since 2008, the S&P 500 is up about 70%.

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