New Budget Deal Boosts Home Health Index

Home health stocks rebounded throughout February after surviving scares during the beginning of the month and late January, according to the latest Home Health Index from Stoneridge Partners.

Amedisys (Nasdaq: AMED) stock prices saw the biggest price jumps, increasing 11.97% last month. Compared to February 2017, Amedisys, based in Baton Rouge, Louisiana, stocks are up 12.33%.

Almost Family (Nasdaq: AFAM), headquartered in Louisville, Kentucky, stocks experienced the second-largest increase last month by posting a 2.34%. To round things out, LHC Group (Nasdaq: LHCG) stocks rose 1.23%.


Overall, the Home Health Index, which tracks the market values of the largest publicly traded companies in home health industry, increased 4.86% in February. To put matters into perspective, the HHI actually fared better than the S&P 500 last month. When February came to a close, the S&P 500 declined by 3.77%. February was one of the more chaotic months in recent memory, as inflation fears caused markets to decline, but then soaring profits led to strong rebounds.

The home health industry was hit with good news in the month that may have quelled some investor fears. The Bipartisan Budget Act of 2018, signed into law on February 9, included several health care measures, including plans to construct a new home health payment system by 2020. Unlike the previously proposed home health groupings model (HHGM) system, the legislative affirmed any new payment model will be budget neutral. First proposed in 2017, the HHGM model would have cut nearly $950 million in payments to the industry.

“The home health care sector was buoyed by overall good news within the Bipartisan Budget Act of 2018,” Stoneridge Partners President Rich Tinsley said in the HHI March update. “The new payment reform revisions position the home health industry for a strong 2018. Despite significant regulatory changes, the market rewarded the sector’s increased stability in February.”


Elsewhere, Addus Homecare Corporation (Nasdaq: ADUS) actually fell last month 6.15%. Despite the announcement that the company would be signing an agreement to purchase Ambercare Corporation Inc., a provider of hospice, home health and personal care services, Addus stock is down 1.29% year-to-date.

Written by Erik Prado