Not much has shaken home health stocks so far in 2018 — not even the proposed Patient-Driven Groupings Model (PDGM) or the potential introduction of an updated pre-claim review initiative.
Home health stocks appear to be continuing their upward march, according to the most recent update to Stoneridge Partners’ Home Health Index (HHI), updated monthly. HHI monitors the market values of Amedisys (Nasdaq: AMED) and LHC Group (Nasdaq: LHCG), two of the largest publicly traded home health companies in the country.
August saw the index gain 13.23% compared to July, according to Stoneridge Partners. Year to date, the index was up 32.27%.
“There’s a lot of change going on in the home health industry, whether we’re talking about PDGM, value-based purchasing or even greater opportunities for remote patient monitoring capabilities,” Stoneridge Partners President Rich Tinsley said. “Sometimes change can be a catalyst for businesses, though, which is certainly reflected by what we’re seeing in terms of stock values.”
Baton Rouge, Louisiana-based Amedisys’ stock jumped 17.25% in August compared to July. Year to date, Amedisys stock was up 137.17%, according to HHI. Amedisys also has an executive office in Nashville, Tennessee.
Lafayette, Louisiana-based LHC Group’s stock likewise saw gains in August, climbing by 8.53% compared to the previous month. LHC Group’s stock was up 61.52% year to date.
The HHI also tracks the stock of Frisco, Texas-based Addus HomeCare Corporation (Nasdaq: ADUS), though it does not include the company in its analysis due to Addus’ revenue mix. Unlike Amedisys and LHC Group, Addus saw its stock drop by 3.21% in August compared to the previous month. Year to date, however, Addus stock was still up 86.49%.
Once again, HHI outpaced the broader market, as the S&P 500 only gained 2.17% in August compared to the previous month.
In general, home health stocks have been seeing gains for quite some time. Stoneridge Partners’ Home Health Index was up 61.57% in August over the previous 24-month period.
“Broadly, a greater inclusion with the continuum of care and a rapidly aging population are a couple underlying reasons why the home health industry has a lot of momentum right now,” Tinsley said.
Home health stocks have thrived despite the industry’s rather lengthy list of PDGM concerns, most notably its assumed behavioral adjustments. LHC Group Keith Myers, who also serves as chairman of the Partnership for Quality Home Healthcare, is among the industry executives who have spoken out in opposition to the behavioral adjustments.
Written by Robert Holly