Leaders from Pennant Group, Inc. (Nasdaq: PNTG), the parent company of a network of home health, hospice, and senior living services in 13 states, discussed the current state of their business on Tuesday at the 2025 Oppenheimer Co. Annual Healthcare MedTech & Services Conference.

Echoing its Q4 earnings report released in February, Pennant highlighted significant anticipated growth for 2024, projecting a 30% increase in both revenue and net income. Additionally, company leaders discussed significant acquisitions, including the $80 million acquisition of Signature Health at Home’s Oregon assets.

“We’re transitioning those operations, and it seems to be going well,” said CEO Brent Guerisoli during the call. “We still expect nearly 20% growth in revenue and over 20% growth in profits. We are well positioned to execute our short, medium and long-term strategies.”

Guerisoli noted that progress is being made in each key business area — home health, hospice and senior living — and the company anticipates that this will drive revenue and profit growth and improve margins.

Focusing specifically on home health, CFO Lynette Walbom noted that, on a macro level, the demand for home care has been steadily increasing, fueled by an aging population and a preference for aging in place. She stated that the company saw robust organic growth in 2024 and anticipates growth in the high single-digit range for 2025.

“We expect to see year-over-year growth by continuing to deliver excellent care for our patients while partnering with acute care settings to manage higher acuity and chronic conditions in the home,” Walbom explained.

She also shared that Medicare Advantage (MA) accounts for approximately 31% of the company’s home health revenue and that in 2024, Pennant successfully raised its MA payer rates by about 2.5%.

Regarding value-based care contracting, Pennant reported that 80% of its home health agencies received a positive rate adjustment based on 2023 results.

“We continually focus on providing quality care and improving the patient experience in ways that allow us to benefit from the value-based care model,” Walbom added.

While the regulatory environment has left many home health providers feeling uneasy, Kirk Cheney, Pennant’s Executive Vice President, expressed cautious optimism.

“Medicare is not really being targeted,” Cheney stated. “There’s a consensus that Medicare, Medicaid, and Social Security are not facing cuts. Although there are threats from certain bills, it’s easier to make aspirational figures in a budget resolution than to actually implement cuts to seniors’ benefits.”

Cheney also discussed mergers and acquisitions (M&A) in the home health and hospice sector, noting that Pennant has a strong pipeline despite challenges in finding deals, partly due to the emergence of private equity buyers.

“There’s a regulatory component affecting private equity,” he explained. “More states have enacted legislation that makes it more difficult for private equity deals to proceed, imposing a review process. This situation may work to our advantage, as we are long-term holders with a strong track record and positive quality scores, allowing us to stand out in those processes.”

Addus highlights positive trends

Similarly, Addus HomeCare (Nasdaq: ADUS) leaders discussed Q4 numbers and how the Illinois Medicaid redetermination process impacted the company’s performance. They also announced positive trends, with a 3% to 5% same-store growth expected, boosted by a Jan. 1 rate increase.

“Coming into Q1 we’re starting fresh,” COO and president Brad Bickham commented on the call. “We feel good about where we’re trending on the personal care side, and we have some nice tailwinds with the Illinois rate increase.”

Based in Frisco, Texas, Addus provides home care, home health and hospice services to over 62,000 consumers through 257 locations across 23 states.

Concerning Medicaid cuts, CEO Dirk Allison was optimistic, saying that there is a real focus on caring for the elderly and disabled.

“If you think about the value-based contracts we have done with Medicaid providers, people that are at Medicaid risk, we’ve been able to lower emergency room visits and readmissions,” Allison said. “Those are real dollars that we’re saving the Medicaid program in that state, so we feel comfortable that we’re in the right spot should some of these changes be affected.”

Allison said that the company has received positive feedback regarding support for its services because in the eyes of the states in which they do business, they are a low-cost provider.

“We take care of populations that are clearly important to the states – the elderly and disabled populations – and the fact that we can do that and be one of the low-cost providers is really a plus, not only to us but the states too,” he said.

Regarding the integration of Gentiva into the Addus family, Bickham said that has gone well despite being the company’s largest acquisition. He commented that, with the success of this acquisition, Addus is well-positioned to consider additional M&A opportunities in the state of Texas.

Further, on the M&A side, Addus is reportedly well-capitalized. Maintaining the strategy to enhance personal care operations in current markets is paramount; however, if opportunities to add clinical services present themselves, the company is reportedly open to them.

“I think we’ll be focused on a few smaller acquisitions at reasonable multiples,” said CFO Brian Poff. “We have a robust diligence process to ensure we buy quality assets. But, we’re slated more toward personal care and complimentary home health and market rehabs from personal care.”

The company also reported a focus on artificial intelligence (AI) in the year ahead, launching its caregiver application in Illinois and New Mexico, which allows caregivers to self-serve. Bickham said that one challenge of implementing AI into a scheduling system is understanding caregiver availability. 

“The number one reason caregivers leave us is generally lack of hours,” he said. “They want to work 30 to 35 hours, and we have them scheduled for 20. We have to have the caregiver update their availability constantly and that’s what the application allows them to do. We’re starting to see much better adoption of that in Illinois than I had anticipated.”

He explained that once caregivers are used to updating their availability on a regular basis, there is an opportunity for AI to enhance scheduling and allow for cost-savings.