EHC Encompass Health

Crissy Carlisle Chief Investor Relations Officer
Mark Tarr President and Chief Executive Officer
Doug Coltharp Chief Financial Officer
April Anthony Chief Executive Officer-Home Health and Hospice
Barb Jacobsmeyer President Inpatient Hospitals
Patrick Darby General Counsel and Corporate Secretary
Whit Mayo UBS
Brian Tanquilut Jefferies
A.J. Rice Credit Suisse
Matt Larew William Blair
Kevin Fischbeck Bank of America
Frank Morgan RBC Capital Markets
Andrew Mok Barclays.
Pito Chickering Deutsche Ba
Scott Fidel Stephens.
Call transcript
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Good morning, everyone, and welcome to Encompass Health Fourth Quarter 2020 Earnings Conference Call. At this time, I would like to inform all participants that their lines will be in a listen-only mode. After the speakers’ remarks, there will be a question-and-answer period. [Operator Instructions] Today’s conference call is being recorded.

If you have any objections, you may disconnect at this time. the Relations to Officer. turn Health's Carlisle, now Investor Chief will call Crissy over Encompass I

Crissy Carlisle

Patrick Earnings & on Thank April Rehabilitation Thank Tarr, Chief Encompass of XXXX Financial you Officer operator President Anthony, for With Hospice; you, and and Officer; Home Corporate Darby, Jacobsmeyer, Encompass joining Chief Health good and Chief Officer; General Fourth Executive Doug are, Barb call Counsel Hospitals; today the morning, and Executive everyone. Call. Health Mark me Coltharp, Quarter Inpatient President, Secretary.

the do in of Before if and the find already begin, greater page with the Page the forth on we statements, supplemental copy, Harbor X-K at last Safe of fourth Form earnings you the are detail information, information not supplemental you website also have available earnings the set are On release. our release, will a on which SEC filed quarter related X

for release statements, uncertainties, as call, cause earnings which differ them. year and are Certain projections, uncertainties, ended the estimates related to During to value to discussed like We read of on our X-K, actual and the results encourage COVID-XX the when review its the our materially those filed. stockholder Form that the expectations of and filings, December SEC in could to from our XX-K risk magnitude Form impact are many including risk and business you control. our XX, the XXXX and Company's and and relating as we beyond subject are strategic which ongoing well make impact will forward-looking and

which today. statements. projections, of reliance of undue do You forward-looking only other information not are and a current estimates estimates, to on forward-looking based update We to the these cautioned guidance as are speaks not and undertake duty future events on place presented

supplemental Our certain non-GAAP on measures. include this and will financial discussion information call

which as at available measure the information, part the the most filed the to end of supplemental directly reconciliation and rule is all to of will measures, comparable and question the SEC, the such one submit remind question, a allow X-K follow-up at we to our release end one Form everyone the For of adhere website. with would to GAAP the available of to are earnings yesterday everyone like question. I that on

you yourself back the queue. If free put please questions, have additional to feel in

Before ongoing. segment our it for turn Hospice want reiterate to and Home the I over I strategic is Mark, to Health that review

and longer Directors outcome structure ultimate Our business review. the our Board no continuation depending mentioned assume made of the of of targets term growth Accordingly, the growth has [regardless] the guidance XXXX current on our decision. our targets some of

will the I'll call With we for the strategic be it able Additionally, review turn cause not on that, further today. ongoing, comment Mark. to over to is

Mark Tarr

thank everyone. morning Crissy. good And Well, you,

have a of to and history well. change We adapting doing it

Looking This patient to we meet world on been am I teams particular, The to XXXX, of we at display. always experience business what has quickly segments our company us. going of proud around our how Both our back responded needs in the the business the on of changes on the and full employees, our patients, partners. center compassionate has year of and impact of do. and caring our been our the in responded

work our of truly first. well-being keen heroes. They the have world employees patients loved direct our weeks patients stories for have ones family shut to how putting as the close homebound only our contact As and has patient at and our a were time countless kind Encompass the them Health doors visitors and staff so connected often deserved. COVID-XX to showed hearted of they our to were heard hospitals were friends forced to clinicians. down, from seniors the of their care our their I most isolated

Turning to expected segment Medicare price They responded existing segments to of initially by demonstrate our new and increasing four and continue both to achieving expanded payers successfully better our to value XXX Rehabilitation Advantage the hospitals our in XXXX, proposition Advantage with our opened performance XX% hospitals beds. regulatory Medicare year-over-year. Inpatient of than impacting reimbursement, changes discharges

to We of pilot and a readmission solutions. rate to tool an from risk Health by This lowers develop this continue Hospital. acute uses the fully implement basis deployed predictive of proprietary model. they program after discharged readmission readmitting And patient market our also use post our We prevention the XX-day points. XXX Encompass analytics determine

healthcare further to providers So we and how this enhances tool value our payers. proposition are excited

a a quality of are highest clinical tool In building for quality all home deploy addition, networks of and agency markets. reporting sniff tool quality to reporting accessing the provider partners development health our we we preferred and in began ensure

conversations expanded with marketing to post PACSA providers DRG or care we payers. addition, our In known our include enhance as and proprietary to information the analysis tool strategic on cost quality acute and level

In and want our by on conditions plans Hospice quarter deliver effective to fourth in on management of margin EBITDA and MetaLogic by field resulted adjusted our of year, their supported spite by points. on leading new year brought the our the the Both and We focus prior our changes The clinical Health related strong exceeded Home segments. margin administrative again our the of COVID Now and via segments management routine management continuous continue challenges. the rate of tool from collaboration. care therapy productivity. model focus costs. industry XXX proactive on pressures our margins, of effective of care patient This basis our PDGM compensation spending we

Our Advantage in and XX% is rate our XXXX. XX% Medicare over rate Medicare to over increased clinic collaboration

new not home for collaboration the for with patients, health executed Advantage United in service bolster that clinical quarter, Medicare also national new fourth Additionally, line referral for a will growth. opportunity Healthcare but our our produce contract will avenue a we only

We about be XXXX. excited have a lot we enter to as

leader From to [indiscernible] the XXXX market as and remain well [indiscernible] yet plus population the supply positioned XX There’s supply the is and for relatively XX%. demand their increasing demand Our the Inpatient waiting XXXX Rehabilitation population. stable, grew me the segment of of beds [indiscernible]. are few in to companies and the eight one build we we necessary imbalance to to operational operate XXXX add capital open XXX to With to hospitals. existing with XXX and both expected and new expect free hospitals and expertise is

We will also expect the hospitals new XX we to continue development in on XXXX. open

pipeline, We have robust expect announcements related throughout year. development a and more growth we the

inpatient educate continue rehabilitation the will of to We value hospitals. stakeholders proposition our about

with on getting the specifically to continue on by we with and MA focusing effective cost one-on-one episodic We use local are influenced the meetings who will in to care regional XXXX demonstrating we we Medicare build [indiscernible] Directors Advantage to that the quality health had our momentum total show payers process. cost providers high Medical and outcomes data to pre-authorization heavily more plan and provider

solutions. We post also will and developing remain acute implementing focused on

capabilities from will of in differentiate we a will prevention analytics, us predictive data and develop readmission fall competitors. the inpatient Our prevention monitor the robust to model use XXXX model XXXX, data In technology our we and pilot deployed including from the rehabilitation. specific

our on launch to and XXXX, of for is of providers stroke. plan programs Our inpatient continuing. American importance the In we the strategic patients Association/American part Stroke families continuing healthcare education a stroke education rehabilitation of and as Heart co-brand Association for after efforts sponsorship

activities. to on launching daily association healthy are support the network stroke blog We assist featuring and success patient videos with stories Encompass completing survivors Health

we and those Let's Health accelerating treating more share in strong have effectiveness about for or talk of A and care, conditions and number Home four better industry cost conditions both now, while demographic increasing consolidation. for and opportunities strong experiencing preference the market we than are home. a a [indiscernible] chronic in tailwind, capture, decade, organically the Hospice. through seen excited seniors growing and patient a in-home of

the may both we alternatives announced results our financial nation, Being a of the Health and exploring are top outcomes As wide structures. consider of us and in providers recall Hospice December, as you by measured transactions allows and to we one array that our Home quality business. for strategic in

ongoing is no review and been its for timetable strategic has completion. Our established

segments. we home XXXX, service the our look So and produce elective we to growth our execution for of will full of we health forward the both procedures line. the resulting In diligent focused that return for remain strategy on

forward to we experienced Hospice. trends strong machine in of look have continuation also We the the

Home arrangements. payment believe interest strong partnering is there we based care in accountable Encompass among organizations, value addition, Health with In Advantage payers, Medicare and

few achievements past years, we where in we the have savings and various Over the organizations. ACL arrangements through participated our these value for demonstrated

in build upon will experiences the way and even We continue Advantage with innovative more work payers. we Medicare to to become these rely

Health America's based right right time the assists regional us visits resulting a for healthy outcomes goal operating plans payment deliver payment quality based deployment risk density outcome with models This in is at care at in and leading performed to and excited leading the a right number the for care patients commitment margins. about higher rates is produce home desired their our the that choice of combination and the includes are it readmission to and the industry further of members we scale plan the better improvements Our of simple organizations more a quality prior their organizations financial Operationally, tool risk module, of for have seniors. here by full the in our ensuring share Encompass for MetaLogics level our to the both outcomes at in engaged and Success patients. for clear will staff outcome. our and days arrangements level and achieve

order with these We a for Smith in program provide growing are two to at in our care support collaborating Home meet a markets. that also need personal services homecare organizations

personal out payers Additionally, rolling This platform device video a [captive] we to their platform physician, care nurse, via a allows virtual call participate secure such or visit manager with computer a are in as app patients program. medical staff. national a tablet other or with smartphone, virtual

in the XXXX, are intact confident As of we ahead we and are look business strong. our fundamentals

created of preferred as believe setting. of we inpatient stronger awareness rehabilitation has In home level care reinforced further an high and even provide fact, we our hospitals a care in the COVID-XX

admissions from And as high value demand the homecare will the for We population divert expect stakeholder and increasingly services to higher away will quality sniffs providers. ages, increase. [ORS]

our Our for $XXX segments. that revenues business for targets This issued We and consolidated prospects consolidated adjusted operating release. per to and EBITDA of Yesterday, These accompanies flow. cash in X% of consolidated $X.XX. long-term good make targets to for to company, million on see net substantial strong financial our XX% $X.XX of to the XXXX billion million confident us. the the $XXX X% both to opportunities EBITDA supplemental made of our remain its longer included includes for our net billion for strength and X% adjusted guidance organization, and adjusted initial can supported XX CAGR XX% are $X investments CAGR the share revenues will to We our our of to growth a term earnings and free consolidated which for X% outlook feel an Page we team you before have operating adjusted earnings businesses. and very in information foundation lie $X.XX we continue CAGR by the that about

with I'll Doug. to it over Now turn that,

Doug Coltharp

good Thanks, Mark, and morning, everyone.

As XXXX on XXXX and we year in before the pleased with initially of that our free began and as Mark segments. increasing levels May of cash consolidated primarily X.X% with X. the suspension XX.X% did beginning with recovered to And to half our quarter both performance the in our census segment, returning of EBITDA inpatient high of stated, operating XXXX year. X.X%. X.X%, we quarter adjusted consolidated up the for year, substantially fourth throughout adjusted acuity are positive discharge revenues our starting adjusted of to levels impacted second were note of net the than was expected XX.X% rehabilitation We actually March. sequestration the in significantly flow per volumes the of strong as higher XXXX being generate in Patient EPS continue of higher Inpatient flow rehabilitation due In revenue cash higher. well the patients free

discharge compared debt in suspension the increased million related X.X% prior and stay, year-over-year mix of segment claims. receivable to discussed of the quarter revenue of resulted decrease a experienced period X.X% per PPE. higher which a we reimbursement cost fourth medical acuity driven to increase as bad an have in resulted a increase average related margin. resulted EBITDA of quarter to patient the $X.X discharges of in by EBITDA balances primarily rates expense, XXXX, to primarily However, revenue Specific our increase from we increases to fourth bad sequestration. XXXX review rehabilitation in in to and compared due our the reserves and XXXX, previously, primarily and our XXXX denied group in perform expense pricing. inpatient and that accounts debt length decreased used a of in we fourth in Adjusted quarter in In in XXXX Growth of

expense Our bad for for we initial and provided year in the X.X% to XXXX that of XXXX. expect range we debt full range guidance for was debt to X.X% the within be X.X% year a

of Turning COVID our episodes the restrictions, from patients home came the and Limitations procedures, have senior Hospice acute that and skilled Health year and for growth limited also and X.X% XXXX gate quarter out elective access declined health We in starts and living we facilities our care segment, nursing XXXX. of out skilled facility elective Home from procedures where levels episodes during of on with in senior to states admissions in our the with prior X.X%. living January of of line strong spite facilities, XX% from over February concentrations exited market up our the XX% surges XX% business of fact year hospitals. in receiving starts in nursing

third an were confer average quarter, fourth impacted our day the the per related on into [coded] quarter further there addition, admissions. to ability XX% increase represented which employees during quarantines and a average In referrals XXX over

continued the fourth team year. home to XX.X% contributing well, Our to of EBITDA health growth quarter costs manage adjusted prior over

coupled compensation with improvement Our changes of in was the our made X% XXXX staff. with down in visit productivity cost May per the time driver the primary of we almost full this structure

isolations start we and growth involves our quarantines. of XXXX, both related As and volume replacement to in joint orthopedic we return cases. And return extremity believe of segments lower mitigation COVID

In of any in health and approximately to replacement orthopedic have to markets isolations treated and our [indiscernible] XX to hospitals did And joint XX in of XXXX, treated with lower limited fewer quarantines our given many XXXX. conditions. with In discussed, complex our we patients As surgeries, that elective approximately medical X,XXX home at continue particularly our patients X,XXX regard extremity With agencies [indiscernible]. impacted were COVID number elderly time, at improved turnaround caps to quarter to of fourth census to the Home on of XXX increased almost fourth Hospice needs the patients by time. that In given for of increased [audio Health to quarantines. XXXX, quarter January quarantined constraints XX any or approximately due approximately isolation XXX and staffing our average due XXXX and XXXX, with employees hospitals. gap] That were times. number

we the XXXX to So constraints least we gap] believe our XXXX. will staffing X, of staffing at focus At regard when levels hospital same see continue provide wage the [audio through normalizing remain half of will price expenses, employees we and begin our to Medicare reduced We capacity year on With to volumes. received increases we did effective October first and to elevated thereafter. fiscal to time managing X.X%. increase

increases, procedures. inflationary due We employee general visits medical to rebound and deferred well to X% increase costs to X% expect as the XXXX of in benefit as

our do saw lower to higher levels, in from PPE pre-COVID vendors expect the not continue primary, XXXX cost pricing to return increase. expect we While to we priced to as subside we do allocations

PPE expect continue elevated throughout to We remain precautions utilization XXXX. as

Hospice development will incur ramp hospitals also our costs Home institutional of admissions normalization segment, with mix of pre-opening our increasing focus of of Health in procedures million We $XX on and the early accelerate. primary $XX and to new expected to up continue is patients. the In associated return million XXXX with elective activities as and and our

XXXX. the maintain changes from to structure expect the in savings compensation We realized enacted

discipline, compensation will which we volume. of visit lead increased the home total to health approximately the comprises our for staff XX% across country the rates nursing However, anticipate nursing challenges

the mitigate be these LPN will We expect the through supported to planning of Metalogics by optimization, portion increases a and care tool. improved that care

our earlier, we targets growth the we stated investments structure company, we longer the to Mark growth. As for believe in and support term reinstated have have capital our

business that one of generate cash levels consistently high that We our are characteristics model flow. free fortunate of of the we is

a to year free five base XXXX our CAGR the half our next cash confidence high in of and cash years X% in target X% is flow. Our adjusted flow expected free over reinforces

our net leverage a spaced. well the are manageable maturities X.X And times debt very was Our year end.

We lines operator, With will the financially future. the well for that, we are positioned for operationally open and Q&A.


Instructions] Thank to do follow-up. Again, to limit ask you. we question yourself [Operator one and one

Our first question Whit comes of from Mayo the line UBS. of

Mark Tarr

Hello Whit.

Doug Coltharp

Good morning Whit.

Whit Mayo

at in is momentum home it levels, XXXX. thanks. fourth the really for health above half the noticeable look imply and I like the when question performance look seems I And at the my you are fourth growing XXXX. visit, like seem year-over-year, coming now. EBITDA Hey, tailwinds just now business pre-COVID up quarter would first have and the quarter XX% some some below then tracking I feels forecasts it cost of for one some, to into When significantly per is into there coming which tracking right

and what it between are how And little thinking have there of within disconnect Thanks. comment near-term how could be range. initiatives just the visits full episode a may little trend, bit implied the could that year then more if you is of feels maybe a field per the of on like trends? a about bit in versus some those you may performance direction the the So perhaps you the and

Mark Tarr

I give April on ask Could insights to that. her

April Anthony


[indiscernible] the volume with team job And mentioned, snippets, done think other I of senior sources. we Doug good this perspective. really continue So on pretty our mentioned, seeing let are replacing encouraged -- from as and in we trending, the you as our volume well if in as December are direction the patients, look a certainly we in on we in the right about appreciate volume has trend perspectives. what side, as that shifts, a And living spite to our

encouraged And of believe all those so and we that that released, of are impacts once that to relatively pressure we return us, the the COVID obviously historical about COVID think and will driven very some sources short is lived. are,

are is make continuing Doug discipline. the nursing we we changes exists, concerned just that visit has visit the by third But in go you nurses the costs that up going see there. and like that And the that just our fourth made and quarter. per well to us discipline. aren't encouraged, structure We cost that that as about in in of community mentioned, nursing shortage visit feel the compensation per also May in back opportunity been exacerbated about COVID And cost per in served

implementation it other related didn't as I So staffing out wasn't distractions. the look feel have we an get were at deck, the the -- so year we the down we not quarter anomaly, relates the to made the and there you improvements seeing as the carefully many have Metalogics this And global pressure there. is course nice slide I year this in given And good that has of finally are about anticipated, we because would we that room successful [indiscernible] if visits But cautiously are as didn't changes in there that think we But also managing our mid we been of had would the per COVID we from we we risk. discipline. have optimistic bit think volume, much provided, of data the the fast the come so nursing really year made. on episode it focus, but anticipated, a progress obviously, I have year. as incrementing, over then, say being gate a second and deployed over until recognize as

with some opportunities leverage And using effectiveness we those see going so XXXX further which are we into tools. certainly the

about to of predict what's volume. about over here are And trajectory year we in sure But yes, also on the momentum think because can take so XXXX. I happen the that us. into costs. that those COVID the encouraged impacts and risk first can't fully we the recognize -- not relative We going behind cautiously to is the optimistic, are we quite And the nursing we are not half

optimistic -- But are think And are produce, are keep hard have forward, are able we pressing so been sustain those. just going by encouraged margins to -- the the I we keeping we we are projection. to going tone in keep us we cautiously to we our and to work

Whit Mayo

-- directionally, us nursing this you give for number any that is the it have can discipline, marker we per anything to across of they contemplated look forward? plan Can to kind a there your going maybe the for within any visit inflation way costs a year maybe circle what --

April Anthony

to disciplines Well, like reflected there. a in may look to if nursing imbalance wage same where will increases [group]. allocated think nursing of lesser proportion obviously, those be you increases wage are and it that disproportionately our X% we specifically X% discipline, in the across the the you But guidance, at we rate some not supply that board higher demand therapy see

Whit Mayo

thanks. Okay,


next Your of question Brian Tanquilut comes from line of Jefferies. the

Mark Tarr

Hey Brian. good morning

Brian Tanquilut

morning. Good

So the at that might What disappointment question of that you do terms you and how you, color for driving I are, at looked I have I that guidance delta are and And what today? the there? you you street am missed? on give look have sure guess, some of about, you numbers mean names can the in the parts thinking guidance investors any just moving is where street as my where Dough is, your think

Doug Coltharp

of the to differential. our Yes. It's our enough for -- built I aren't me guidance to from budgets detailed areas enough, that be is models will brick-by-brick of budget. driven-off are analysts the to painstaking aren't bottoms fashion the the up. of specific so models in point our say detailed most a able And

$XX impact guidance. costs be suffice medical expenses like Having the first ramp year, of have and I in more to visibility I goes think million side up our the some of provision that, I things COVID that I and new of complete to of think areas there with group to analysts will business. So the particularly on hospital of areas had volumes relates And in our said not the regarding expectations think those differences. may the the our associated that substantial employee as to half expenses say may benefits, of into the detail both our some in that activity, primary $XX into is normalization million of pre-opening point the would the some [indiscernible] just the of the

Brian Tanquilut

of Got then guess, of you. are you ranges? the And Mark, the goal I the for progression to sort tweak – how in thinking you so back whether endpoint XXXX And revenues your or the guidance get about, it's earnings recovery business? pace long-term of terms or these is growth that the an you indication about of revised what of fundamentals kind are then thinking your to belief the in And to targets? long-term

Mark Tarr

in our terms for that typical we've beds to look continue the long-term XX are the I robust our of semi the Health growth and demand on right staff are us, reflect rebound year, on business, mentioned of given pipeline, year, targets announced now, bullish out terms Doug that got in and to having will Brian, operating and for in quarantine would caps got we've opportunities for already meeting eight that this the Home our for that Hospice. Yes, to this there coming that we of past grow hospitals very we've mean, the now next the year, capacity acquisitions opportunities the we have confidence And private the are experiencing very come we are for our in numbers hospitals we I demand seasonal continue services. all think challenges. the -- in seen both segments, in opportunity and

have to So longer there the in outline fundamentals these are growth targets our that term provide we here.

Doug Coltharp

and done the last same And base And add reflect our our that of shortfall we've impact of in Investor lower at out the lower top in is the implied were at then from underlying doesn't our changed. that XXXX station CAGRs the is our to then in targets that reset a COVID base essentially what Brian, any business that's with plans related March. we fundamental one to arrive segments. if XXXX, temporary growth that, of for of reflective to not change laid just COVID. that, on business that solely believe And And demand could set the resulted Day the either I two that is fact we in to have XXXX growth a

Mark space be acquisition continue Hospice the said, [indiscernible] We business tract heavily of Health growth segment. capacity and and within for continue pursuing will in as to invest, Home well in mode additions just as opportunities we exist as in organic the that to that

Mark Tarr

and on any right Brian, have respond we And and other to all with able near-term be it's that uncertainty will to of pandemic. we how tied it's just COVID. quickly now vaccines get the side this

Brian Tanquilut



next comes Credit of question A.J. Suisse. Rice from line of Your the

Mark Tarr

Hey A. J.

Doug Coltharp

Hi, A.J.

A.J. Rice

targets. part reinstating Hey that previous long-term you -- everybody. appreciate Maybe discussion the just on around I follow-up guys that.

in factoring year that previous I on if think we calculating sounds up the I coming thought Day changed XX it targets, and there it's EBITDA the Investor point that your out think Doug, of midpoint outlook like Do ago, am you was that's I on not to impact that actually has place out into just wonder the a put though, have we the wrong. about what basis sort margins, outlook, of are below in this going million with points minute end same to goes something comment you how XXXX if that's about forward? CMS least get? there it the you XX.X. lower in thoughts March from maybe Is And project any XX about you because at you that? do demonstration string the XXXX, midpoint to any an that's out That's next

Doug Coltharp

you than it's actually A.J., not are getting substantially are points that say when closer number, the to two am mid going closer. I they am the exactly compare suggested. same delta just I I but the that that

reconciliation right a I to math here. So don't into get exercise want

A.J. Rice


Doug Coltharp

I already that is because It With we've denials more in regard to to and oriented review positive health move can early not about to requirements will company the impact information could through systems business the analytic management with a well that business. in choice well of choice have is What we that effectively, demonstration, in is forward execute to We out claims to And very if unknown our is going stages. process [indiscernible] we about amount fact. demonstrated as reduce there than confident place. to that is review very known very our that great because really are have process it am there will disruptive anybody begin with business, that It's there. we be new adjust the regulatory after is we it's our home the that. it as demonstration,

Mark Tarr

-- further noted. Doug to number the sure that and standardization certainly would ago, documentation this as substantiates it’s that years move a this real RCD ourselves A.J. the investment forward. the our make But medical our made a documentation to across in board positioning electronic we record through it is in position, good if so and we see as of there

Doug Coltharp

Okay, lot. all a right. Thanks


Your next William question of comes Blair. from Larew Matt the of line

Mark Tarr

Matt. morning Good

Doug Coltharp

morning, Good Matt.

Matt Larew

but guys. half follow Brian's and of on question, maybe let's versus instead focus remove three on ‘XX Doug up XXXX. good Hi, models just wanted discussion morning, to from second I the

into And an apply expected second quarter, you that's alluded or margin back on XXX are adding frustration, of was that their the the than that costs that certainly on obviously, lower health that ‘XX. even basis back a to me tailwinds about removing home So side EBITDA for I extension. coming the side. of picture you ‘XX think first those think, returning startup points for excuse characterized after And number half I today, the but volumes wasn't have the

visit to maybe So generally us COVID take, are that can think, numbers, I have increases trying acuity bad there just direction of that would of reversal we are things or might any guess maybe you the that costs bridge PPE, what to debt other I gap? help in kind the point am

Doug Coltharp

So of to to the second reconcile trying half second half XXXX XXXX? Matt of I’m the

Matt Larew

right. half for are, to XXXX, second the EBITDA No, sorry, margins relative XXXX what of

positive I were [XX.X] talked and you And for so the just half second given that, the and reconcile margins EBITDA of and guide [XX] think [XX.X], the XXXX, am trying about? method to about I

Doug Coltharp

that the timing that's gap think the I and I And with substantially just more two between think half up if closed numbers. those But at a quickly. pretty costs the sequestration likely that if least the past ramp you of to you not move you then the that combine hospitals, lot of than pre-open and half. have Yes,

Matt Larew

will enough. we contemplated it that just again, will year given Medicare Fair nice side, then about some you model. already have I Okay, my the and I thought look throughout about a Advantage pricing the updates I preferred Maybe would relationship then would volume to And is is an you any involved United be share color can give alluded curious be great. on additional any the provider it you there ask that trends extent there. contract to,

Mark Tarr

April contract the United will first. cover

April Anthony

our Healthcare national about for contract the bad guy, serve [indiscernible]. bit paid is Yes, coming little the us on part patients going some contract volume business. out going a we providers think opportunities panel national we of of are good gotten a opportunities, have of one-off of that to business give we've of to United historically, United more But guy fashion. the being for episodically combination a But I better excited that in And joining been contract. us to it's long that, give run, it's

service to an the for on as payment this we XXXX, when much in on and so was pressure about has shift shifted be margins from recognize as near-term the of we some element, episodic a bonus performance, also contract, excited February we a after had it, the could are it in more national fact we brought beginning that there XXXX. that value And [indiscernible]. based And fee based payments by excited quality prior

a the of will staff of think So all margin we quarantine, us get ability it to we that pretty the in pressure we also near-term, time relationship our it's early put little good over we off think significantly. brings bit we the grow as of recognize bring in of it it'll on that a XXXX. think relationship part But

we As line kind contract. of rebase that

Mark Tarr

from seeing Jacobsmeyer regard insight give are with our what hospitals. ask plans we MA to Barb to I’ll her to

Barb Jacobsmeyer

the And have continuing focused you on So in XXXX. pre-ops as in MA XXXX we May September we continued to we growth, be of you in some the But that and seen as XXXX. XXXX. nice that are in back obviously assisted in relaxation see know, already nice growth between have

sent that in not us we have here is think maybe past, thing great the saw for they [earth] I us. in would the to admissions that XXXX,

was the that of Some to do waivers. to

was patients, Some outbreaks in or limitations to other COVID accept unable really because to were snips due maybe the snips.

we Directors So going MA Medical our these of on plans. data as the outcomes have the to assist with now more of continue patients. we those discussions, that's And particularly us

really it directly their to talk can So as proposition patients. value the that about related we

Matt Larew

you. thank Okay,


Kevin from next America. the Bank comes of question of Your Fischbeck line of

Mark Tarr

Good morning Kevin.

Unidentified Analyst

Joanna Thanks so long-term discussion in the Actually, morning. around the filling taking for it’s -- But I this is questions. guess on much targets. a growth good the Gajuk follow-up just for Hey, Kevin.

is to were maybe then EBITDA our And math? numbers but any of as and of is a these we you long-term you so guess margins I would the particular there or little where that slightly closer, so point either are implying of case, -- I the PPE related getting at targets? lower bit or the that's also around what guess when kind would those lower we that growth terms in area in targets but describe the, something do segments are anything, you revenue, it saying that's So terms the there costs if higher

Doug Coltharp

XXXX XXXX. base all which those the a the ascribe March anticipated simply for course a dissipate last you as are These and of reflect between to we delta the lower had temporary XXX% that through think we anticipate than fully exist. I degree doesn't we impact precision a of will that attribute the we fact into reading COVID, CAGR year that five CAGRs is

have some addition of transition. the you in base, lower residual first the impact So year in to the XXXX

have so spread allow basis Beyond CAGRs five that, you year XXX on rounding. points got some for

Unidentified Analyst


Doug Coltharp

have And there. the reflected some I that And in top assumptions the to will think already about growth that that is we see is lower, of you we see have changed. plans of our talked not me you what that out on base the have put

that or going last ways XXXX. we essentially are there station targets discussed the year. shooting essentially or we from are there. unchanged for So XXXX multiple in from XX If that the arrive so basis of higher, to in you points at is are to XX the those that But lower with are be get margin here can we in we March same

Unidentified Analyst

That's to great. responded what Okay, how based you question. I was just prior the confirm, trying to on

that. this extended talk the know a introductory how at legislation I we mentioned obviously, I Smith Smith April, guess, such, contracts with is if optimistic don't at Congress, could you So relatively you you something participate for tax benefits I may, just, would question be it your something actually on you introduced guess be about when remarks partially could thank in that association in around an for could Home, can Home, And passed. follow-up I be personal guess mentioned about in, But, just as care income providers. to

kind accomplish? I would for you adequate markets of to be frame your in you. not about So of be opportunity services? Thank able -- this cover think to guess, So can actual terms presence us you personal that do within how before because just have you care

Barb Jacobsmeyer

I so happy am about to Yes, that. share

able timely our personal have And -- had our was of ensure are why the some have who division private part critical presence, was of can care we that we that us that to organization. in some don't responding. that respond as companies that national focused partnerships duty line that could create so with fashion be our we service as the same for it to So key competitors

family have can And place, kind that we that private feel so of leverage are in support structures have we duty those those line. service beginning like and relationships even got we to when

to makes Smith private that becomes of As likely at payer be for you there that to it source know, we can that home it we into take and a today of XXish do those a be cured of acknowledging the average are cohort legislation expensively duty they than version hopeful services at will the for will certain that we but more actually there Home patients facility, provide that. that out less get dollars would care Medicare [indiscernible] than

care technology program tools we that virtual with if think there's patients can for support historically on effectively certainly we lags able have we the be the and a skill relationships keep plant then quality patient the source that use and to at that home those contractual care it really private lower cost. So those to our performance side at funding a to to clinical strong duty, for finds that that to our that safe got

it program might forward and ways is before we that and legislation it So for can fund we even that are looking certain on evolving, deploy in that to there look easy execute a instances.

Unidentified Analyst

Okay, thank you.


from next of comes Markets. line RBC of Morgan Frank the Your question Capital

Mark Tarr

Frank. Hello

Doug Coltharp

Good Frank. morning

Frank Morgan

some April Good I about volumes December. hopped to in And apologize. the late morning, I of was on just think point making at comment

you both in that So first do that [erg] I I in side apologize quarter, have and what healthcare if I around so you the guess I will on? the talked And hopped and ask in you you home far then, correctly. side, about are the seeing before understand I any commentary it

Mark Tarr

least where this cover point. we just will I up at are, Frank to

is a which seasonal we segments, after we going And confidence that both for know, that services the seen have of our is have As in to a typically forward. testament rebound the have you operating there holidays. demand strong we

certain segments in week half with challenged are staff so. the staff are news a on of in decrease and The seen We have last number that both a that quarantined. the over markets or positive is, quarantine

any higher the trending have So kept then of fewer And When staffing restrictions. because that staff all where have on uncertainty, positive get that have a to private our rooms temporarily we that number pandemic. hospitals of us strong, a on buying off requirements semi demand COVID. in at that is and supports tied marketplaces, have the isolation we've also uncertainty side had in been will getting we thoughts manner. And other have more hospitals, have we we back, that market certain enforce to near-term the least those more kept of where we is have is very this opportunities but we

Frank Morgan

amount vaccinated been down COVID. your in has Got you. total And you staff terms where of that are of

Mark Tarr

small they of employees [XX,XXX] their total of had vaccinated who a we with been those have doses. have Frank, So second portion a

of our like would getting have the close marketplaces, they to we've had total So been staff XX% vaccine. respond out that the to to

distribution continue that So we with will process.

state-to-state with from lot As terms we the see continue of that. marketplaces, of out of in giving progress to you effectiveness know, a to the volatility but

Frank Morgan

in that event then And more you. is shortage, the about seeing the something the that? can't go people home some limited, there into that’s nursing [indiscernible] know and the whirlpool what but driving just is, is am April aren't driven anything the by one, and pressure in are just because or Got the on was of curious, the comment question, side available similar made actually shortage else you the about I last having having being, COVID I

Mark Tarr

I will we [herb] ask Awhat on are seeing side. the

April Anthony

from in some good now nurses be saying some been more work. the back, again, those that our because be On want hearing out of news so point want is, about that to we want of get we that able see they side just the folks on anxiety. are really we some though, to and more is that out, [herb] of maybe they did in and say -- to come at those experienced the it's and our see all The to fears mentioned, vaccines workforce older the get early this I back back as vaccine quarantine the Mark didn't they would coming to being back. decide

as we we vaccine. So see I that more will that get a about think more of

Mark Tarr

Frank, general, think They was the of a nursing until are all I the no of the tedious tunnel. rolled you light there out. have was just end -- being in that vaccine was there patients really and clinicians overall COVID

a stress is not and we the pandemic, other the So whole. of really of clinicians, on workforce our industry side to in specific going caused are and didn't this but as know when get that lot a they the to

brought sense some to to and hope some the I So vaccine for clinicians. an is endpoint look forward of think


from comes line question of Barclays. of next Your the Andrew Mok

Mark Tarr

Andrew. morning Good

Andrew Mok

remained volume of you elective Hi, a volumes, lingering home growth in health And and Can XXXX do comment facilities your with on to see lower how admissions store Thanks. Wanted the the single-digit same to moderately good independent depressed and trended to drag even in continued procedures. from headwinds? the the on COVID portfolio? mid path admissions back morning. health rest some the assisted you of home due follow-up living organic

April Anthony

for you question. that Thank thanks. Yes,

communities decline So to meaningful the that about from from sources. the admissions snips, combined, did admission living roughly decline a areas that are we see patients X,XXX out we discharging like from three senior three called and those came surgeries

overall saw was our down organic growth about you As X%.

XX those back performance in attenders make you we up that sectors to difference. if add So had in other there, really strong the a

had about for not think, X,XXX I it been that X% improve. a at be decline, you'd

of the see making I getting encouraged. a a half feel lot could replaced realize very subside that strong that we new we we I about the of with sources do and growth what have I back second And referrals very think the we those, we as assumptions is possible. think of organic there's in are something have you projections that, this believe that am to been. cause Now, year, posture, But specifically The and the last when last admission virus look at that sustainable.

we can a out recovering past really we side once the we think what period. on used win-win and get combination come out have, develop of other actually what so with the And this, to come and to got maintaining we COVID

Andrew Mok

walk EPS the driving and initial EBITDA X% guidance, the Can guidance EPS and that growth? and on EBITDA lower. Thanks. EBITDA of is XXXX is X% the you EBITDA XXXX the at spread through looking secondly, And EPS us thanks. are some Great, the compared about lower assumptions about line below to

Doug Coltharp

interest biggest I line think single expense. the is

Andrew Mok

that's delta. entire the So driving

Doug Coltharp

have right driver. I Yes, believe me, the don't I but mean, that's I primary front that in of

Andrew Mok

Okay, great. Thanks.


comes question next Your line of Bank. of Deutsche the Pito from Chickering

Mark Tarr

Hey, Pito.

Pito Chickering

guys. putting Good in. for morning Hey, me Thanks

new this the guys is the if United payer that fourth into converting contracts? think signing you you and collected? the know, MA commercial April, I more all contracts? when cost the the for definitely taken analytics, and and guess the data we per iceberg is How like aggressive tip it where leverage and the from about with questions Asking in the of getting you've guys structure you I with should mix new at quarter, look contract you've in cost XXXX, visit

April Anthony

certainly have very been we think a have that those. that moving always Yes, I on felt we we relationships focus the want to And level reimbursement comfortable quality wanted to of about of supported care we to the levels we that And very momentum into, the direction. that wanted deliver. that in discerning enter lot we

but that. get And base. relationships to think our begins because lagged creates change model operating the and to and the those their contracts not but and efficiency in we relative our more continue requirements And better requirements. reimbursement also that's more as or as of industry That so that efficient we only lack create I direction are also seeing move to of we've in payers said have opportunities, them, more associated non higher Medicare well, cost with lowering historically authorization right

take. time We are in and effort, there if become that's those. contracts requirement very a really the being burdensome we discerning And pre-authorization about are to is we going to saying both that no

you those we our partner bit talk much And very property they are or outcomes. can trusted visit every we of get doesn't care when And and be who little rates. well, where down look with we are perform and dimed kinds think trusted rather even categories those can rewarded ratings, a to be we form trusted allocation, partner those as on at very, us they to payers, become much you star then that partnerships result, be are relationships about that to both paid I outcomes, looking What in ask about well want is instead nickeled Those negotiate but when think, be hospitalizations. deliver look to don't very star those clinical looking a can and don't know so at in sources and I and of frankly we emergent partner a and a to statistics rating. for right you have the we but very is to turn, to for a of

the move on to those direction, quality to continues in will that in care delivery. think see ways us that relationships continues support I tide you expanding So our as

Pito Chickering

in home great. wage a Thanks normal demand levels should year the patients Okay, during question is nursing for for today. home we nurses much. the on inflation again, helping who next And nursing home then any follow so that up setting How or the huge ahead or think about are employees of April, two? you within

April Anthony

rate of care I toward healthcare then Barb But childcare then period, higher cost market up that that a of and don't the inflation come necessarily I some home of as of have sectors, younger driving the the because are the in are will provider keep hospitals we've even different to of market. gravitate that our COVID. a think market the both a young think other will potentially type a hopefully, the based same which cohorts as providing those that nurses, for of service. a older have seen a nurses subsides of that than recognition seen And during families, seen a leaves because see just home mentioned, care just of challenges COVID existed we lot COVID we meantime, who though we've the as tend early reasons, lot variety leads we the raising our market, to in back we've are

are and chase to to to work recruit some having do to those having of they are their falls. nurses hospitals acute what We care

just think just that of not the the sort competitors because behavior, our something that's And byproduct, workforce. but it's we that so a the change of hospital inflationary to are going going be your leader to markets, I in are we it’s

Pito Chickering

Thanks so Okay. much.


Fidel next Your question Instructions] from of Scott the [Operator Stephens. line comes of

Mark Tarr

Scott. Hello

Scott Fidel

had call conference. to to on Good I another thanks. Hi, morning. earnings hop conference late

for So questions have two hopefully, been hasn't I you. asked it –

to you think the the the also pipeline The included whether in wellness terms for not sort are you've XXXX? M&A pacing we of how and review. first the you that $XXX those hospice Home of just we and Health influence if just obviously you executing on specific thinking and of initial and just the target sort of should then of have strategic terms interested M&A us your the can strategic M&A about in would the million to that markets in relates But as of just million, health, an home give of target business, you for $XX in in is to that sort framework about, comment on review expecting and terms Hospice that [BIAS] plan that

Mark Tarr

Scott. Tarr. Yes, Mark It’s

on timetable know future for you right in as and now ask on So we the April but on it in is acquisition. her set to a thoughts process comment that, ongoing, will preview can't the but weigh

April Anthony

Yes, of saw is back from we of acquisition resurgence year. that half a both at was that the definitely rearview low activity the of now. mirror and the kind things in the year And last the transition COVID beginning [indiscernible] in and experienced

having Health collaboration. scale also Job with like When acquisition strong focus are continue clinical to So number we'd we Health capital in encouraged like focus three, Hospice, to good markets really pipeline. doing be strategies. seeing on number to markets we with lot build we of more that that our that options. because are and to and improvement is, [erbs] to three like number overlap see in Job margin to consistent able the that activity we we our Home job we are we we're two wearable find on because deployment just Home M&A they overlap results going that and a one, create And create between some opportunity. and we of want is that density goal, see and And [erg]. really

we Health of really are get hospice And not the best over we focused where categories saying, Multiples knowledge other, are one looking Home deployed. so three serve at and than in does on obviously, more those the which if and or Hospice three one one for hits particularly can sector. those particularly this rising, realistically, the core one it we're criterias so acquisition,

create it grow, continue to discerning We the yield way best put and wanted the be buyer. to but can the we so carefully organization. in And capital to we that also a want our for

criteria. looking of this And at that transactions array so strong three we're an meant

Scott Fidel

my interested just health supportive in Got it. for am interested up staffing? they How on playing half here the the changes put that for I depressed emissions an does sort that model you just ensure had margin update COVID compensation in home adequate follow start question. was in Thanks. that the business profile seem implemented And if back clinician and and accelerate? volumes you the you sort that ability for you I to in hospice that model remain, model then have but adapt does just of out it have you just to up because based of like to the do and how see will flex that would place of the stay XXXX, volume if on end in you

April Anthony

earn that as compensation. above itself, Yes, can what the if over news with because prior you or threshold lower work base But add turn the done bonus this good the flexes level. it is back, lower aligns we've and is I base think sort pay incentive really lower model a in pay of create an you'll to in compensation your

it's So really XXX% it's are of been plan side for win-win. got the as because was, the to get high basically pushing a really, get productivity and people to excess end there. of And to the trying what a really result, employee And our equation. to shifted previous opportunity motivation they've the

of change. have lower making didn't we at flex by think all natural headcount number therapy our the capacity. We I in this

in matter the whole it a could we beauty productivity drive of but efficiency our realization. fact, that that was keep our really staff of As is

move one So to I that as in grow discipline capacity we into service think in got that XXXX. we've the

Scott Fidel

you. thank Okay,


comments. closing to Crissy now Thank the for Carlisle you. turn I'll call

Crissy Carlisle

has Thank today's joining call anyone again call. If at questions, additional you please for XXX-XXX-XXXX. me


earnings call. in participating for XXXX quarter you Encompass fourth Thank Health conference

disconnect. now may You