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:

Home Health Stock Index Shows an Uptick

Stoneridge Partners reports that for the month of May the Home Health Index showed an increase of 4.4%, and the S&P 500 continued its increase.up 2.1%.

All stocks were up, however the increase was primarily on the back of Amedisys. After hitting a low that goes back to 2003 of $10.04, the stock jumped 22.7% to 12.32. Last month, Stoneridge ruminated as to whether or not it was, at that low point, a buy.

Home Health Agencies See Gains on Stock Market in June

HCAF Associate Member Stoneridge Partners is reporting a 5.6% gain for the home health index (HH Index) for June. The HH Index measures the performance of four publicly traded home health companies, all listed on the NASDAQ — Almost Family (AFAM), LHC Group (LHCG), Gentiva (GTIV) and Amedisys (AMED). This index is updated monthly.

2012 Conference Preview: The Number One Mistake in the Sale of a Home Care Agency

By Donald Cummins, Stoneridge Partners

“I made my fortune by selling too soon and too cheap”. Take a moment to think about that. Those words were spoken by a Texas serial entrepreneur who helped finance the start-up of many companies, including a home care agency….which is how we met. His point being that the best time to sell is while revenue is on the way up.

Through years of experience I have to agree. I have found that, in considering a sale, one of the most important issues business owners face is timing. While the business is growing, owners want to hold off in order to receive top price. But if the business turns down, a great deal of value can be lost, and lost quite quickly. I have found that many owners underestimate the loss of value that results from a relatively small drop in revenue.

Four Publicly Traded Home Health Agencies See Increases on the Stock Market

Stoneridge Partners, an HCAF Associate member, is reporting that the S&P 500 closed out the month of March up 3.1% and the up 12% for the first quarter of the year, the best start to a year since 1998. Stoneridge reports that the four publicly traded home health agencies did even better. Bolstered by the strong market in general and perhaps a little clarity in future reimbursement, the Home Health Index gained 8.9% in March and is now up a whopping 44% for the first quarter.