Amedisys CEO: ‘Volume Cures All Ills’ in the Home Health Business

Amedisys Inc. (NASDAQ: AMED) wants to be on top: the biggest, the best, and the first choice for employees.

To accomplish this, the Baton Rouge, Louisiana-based home health and hospice giant is focusing primarily on strong volume growth—a plan of action the company’s CEO, Paul Kusserow, believes has enormous potential.

“We believe volume cures all ills in our business,” Kusserow said June 8 during a presentation at the Jeffries 2016 Healthcare Conference in New York City.

That belief in volume might explain Amedisys’ current pipeline, which Kusserow said consists of over $100 million in EBITDA.

“The rate we’re growing at is well beyond the industry growth rate, which we estimate at a little less than 3%,” Kusserow said.

It’s not enough to be the biggest home health company, Kusserow recognizes. It’s also important to have clinical distinction.

“If you can’t be distinctive clinically, and if you can’t show and manifest the fact that you’re better than other players, particularly mom and pop players in the industry, ultimately you won’t be able to compete, particularly in value-based purchasing states,” Kusserow said.

About 30% of Amedisys’ business is in states with value-based purchasing, Kusserow explained.

And when it comes to bundled payments, and government initiatives like the Centers for Medicare & Medicaid Services’ (CMS) Comprehensive Care for Joint Replacement (CJR) initiative, Amedisys plans to make its thoughts heard.

“We’re working with the government on a consistent basis—the industry is, we are—to try to make sure that the programs that they’re putting out actually make sense,” Kusserow said.

Amedisys also wants to be quick to adopt government programs, but only those that work.

“It’s always good to be a fast follower, once the version that makes sense is out there,” Kusserow said.

Amedisys is focusing on understanding which lines of its business are the most profitable, where it can deliver the highest quality of care and where it can deliver care most effectively. Business mix has also shifted to the forefront of the conversation.

“We’re analyzing what type of business we have, what’s the nature of that business, what’s the contribution of that business,” Kusserow said. “We’ve had a very concerted effort, we’ve seen some good movement in terms of changing the business mix.”

Specifically, Amedisys has been placing more emphasis on driving in more fee-for-service Medicare patients. Amedisys has also set a goal of being the home health and hospice employer-of-choice. The plan is to attract top-notch employees and keep them.

“We can’t deliver high quality unless we have great people,” Kusserow said.

The industry turnover rate, by Amedisys’ estimate, is about 38%. Amedisys’ turnover rate, meanwhile, is 27%. The company has stressed to its employees the importance of Star ratings, a system Kusserow “believes in” and thinks Amedisys can master.

“We anticipate that with the resources we have, with great people, with great resources, great protocols, great technology, great training, that we’re going to be the top of the heap here, and we need to make sure that we are,” Kusserow said.

Written by Mary Kate Nelson