Gentiva's second quarter investor call showed hospice revenue to be lower year over year.
Hospice revenues were $172.3 million in the second quarter, down approximately 4% compared to $179.2 million in the second quarter of 2013.This glaring drop came despite taking over 69 Harden hospices last fall. Nine months ago I wrote:
Gentiva CEO Tony Strange beat the "hospice marketing equals home health marketing" drum for nearly two years on investor calls. When hospice volumes didn't go up as predicted, Strange finally admitted they weren't the same. Yet, the OneGentiva reorganization includes:
"Each region will have a single-sales organization focused on the delivery of a unified comprehensive service offering to our referral sources. However, the product delivery systems for the 3 business lines will continue to function separately as they do today."
If Gentiva hadn't unlocked the key to hospice marketing as a stand alone group, how will it do so in a unified offering?
It didn't. OneGentiva's third aim was to improve hospice revenues. Wall Street is still waiting. Longtime hospice staff shake their heads.
Gentiva yet again went in the opposite direction on deleveraging.
Our consolidated leverage ratio for the quarter was approximately 5.9 under our credit agreement.However, Tony Strange was excited about cost reductions imposed:
I think David and the operating team -- division team here, Jeff and the 5 presidents in the field, I think they have done yeoman's work in getting out ahead of the costs on the cost side of One Gentiva. So I think from a cost perspective, I would tell you that we are where we expected to be or even further along from where we expected to be.Those cost reductions included critical office staff and clinicians, at least in our hospice. Our service pales in many ways from where we were.
Anonymous (from Gentiva)
If one were to sum the revenues of al the sites that were closed due to low performance, according to Gentiva's opinion, plus those consolidated I wonder how close the number would have been? Hard to hit revenue goals when sites that actually generated revenues were closed. but the cost of those people remained for awhile. that combined with a much lower level of buy in from staff which now very negatively effects service equates to poor reputation and people not using us like they once did. it is sad to see a census go from huge to small in less than a year, lose facilities because of our reputation, and now inconsistent service. but good job jeff and 5 presidents- layoffs and closures are an excellent way to grow your numbers and control your costs. but what happens when that well runs dry too? Im sorry I asked an educated question my bad. this is clearly being positioned to be sold, we arent stupid.
ReplyDeleteCut services through the bone, then sell the company to an investor who will add even more debt to Gentiva's bloated borrowings. Top management will do their best to pick an investor with confidence in senior leadership. Thus, expect more operational efficiencies at levels below senior management..
ReplyDeleteWhat $2 billion in revenues health care company spends $3 million a quarter on capital expenditures? Electronic medical records anyone?
Anonymous (from Gentiva)