Ben Breier's Hospice Tale

StrangeTony,

Kindred held their earnings call last Thursday and President Ben Breier was effusive in his praise.  He said:

In the hospice segment our team has made terrific progress on the challenging reorganization we've undertaken over the past three years. We have seen significant stabilization over the back half of 2015 and this quarter we saw the first quarter of year-over-year census growth since our acquisition of Gentiva with patient days increasing 2.9% year-over-year. 

Not said:  Patient days actually fell from Q4 2015

This growth comes despite average length of stay decreasing by three days and branch network consolidation reducing the number of hospice sites from 193, at the beginning of 2015, to 175 at the beginning of 2016.   

Not said:  Admissions increased by 70 from Q1 2015  With 177 hospice sites that's an increase of 0.4 of an admission per site.  Average daily census rose by 223 for the hospice segment or an additional 1.25 patients per day census wise for each site.

Average hospice revenue per branch grew more than 8% between the first quarter of 2015 and the first quarter of 2016. 

Not said:  Less branches and stable revenues will do that.  Hospice revenues decreased by $1.8 million from Q4 and are the lowest full quarter since Kindred bought Gentiva.

We expect to see continued hospice growth driven by demographics as well as expected enhanced hospice utilization rates. We also look to expand our hospice presence with tuck-in acquisitions in markets not yet adequately covered by our existing branch network.

So far this year we have acquired hospice operations in North Carolina, Ohio and Florida. We're pleased with the margin improvement in our home health and hospice businesses as they each provided on a year-over-year basis up by nearly 1% when last year's quarter is appropriately adjusted on a pro forma basis to include January.  

Not said:  Part of that Q1 margin improvement came from health care and retirement benefit reductions for former Gentiva employees.

I am glad to do my part to make our hospice more successful in care delivery.  My hospice co-workers and I don't want to personally sacrifice to enrich senior executives.  Q1 included $38 million in incentive payments to Kindred at Home executives and a relative handful of other employees.  Their bonuses alone ate up 21.5% of our first quarter hospice revenue.  That is evidence of the distortion from above.  It can't be called leadership.  It's far too selfish.

Anonymous (From Kindred where revenue declines are growth)