On a conference call in late February, Amedisys CEO Paul Kusserow could not overstate the success his Baton Rouge-based home health company had enjoyed over the past year.
“We generally try to avoid hyperbole on these calls,” Kusserow told investors and analysts on the line. “But it would be inaccurate not to describe our performance in 2018 as tremendous.”
With three acquisitions in 2018, followed by two more in early 2019, Amedisys has grown rapidly over the past two years, adding a personal care line of business and building up its hospice service. Not only was the company expanding, its quality of care and employee satisfaction metrics significantly improved as well—ranking Amedisys among the biggest and the best in the home health business.
And it hasn’t gone unnoticed by Wall Street. Investors and analysts are keeping their eyes on Amedisys lately as a highly attractive stock that’s poised for continued growth in the future, surpassing its peers in the medical industry. The company’s 2018 market performance outperformed the S&P 500 by more than 100%.
What’s even more notable, though, is the complete transition Amedisys has undergone. Five years ago, the 37-year-old public company was struggling, marred by federal probes that sent its stock price on a downward spiral. New leadership had to be brought in to launch a turnaround campaign in 2014.
Kusserow, who led the charge and was named CEO that year, said Amedisys was a company that had lost its focus. There were three things he knew it had to do to change that: 1) improve patient quality, 2) take better care of its employees, and 3) make sure those employees have the best tools to do the job.
“In our business, we are nothing more than our people,” Kusserow says. “We don’t own buildings or assets. All we have are our employees. Our really simple focus on patients and employees—and making sure nothing gets in the way—has unleashed an incredible feeling of goodwill and a culture people seem to want to be part of.”
Amedisys is also riding the tailwinds of a home health industry on the rise. The baby boomer population is getting older, and trends show they prefer to be taken care of in their own homes, rather than hospitals or nursing home facilities. And that means the future of a major provider like Amedisys looks even brighter than the present.
“We’re going to see a bigger and bigger push to move people out of nursing homes and into their own home,” says Brian Tanquilut, a health care stock analyst with financial services firm Jefferies. “It feels like we’re in the middle stages of it now. (Amedisys) is in a very good spot at the moment.”
Those who have been with Amedisys for much of its history have seen their share of highs and lows with the company—like board member Jake Netterville, who remembers the days when Amedisys didn’t even have enough money to file for bankruptcy.
The company, founded in 1982, enjoyed a successful run after going public in the 1990s, with consecutive years of record-breaking profits. But that began to change in 2010 when a Wall Street Journal article triggered federal investigations into fraud allegations involving Amedisys’ Medicare billing practices.
While company officials denied wrongdoing, they ultimately settled with the U.S. Justice Department for $150 million in 2014 to resolve the allegations. But by then, the turmoil had already taken a toll on Amedisys’ stock price and on its founder and CEO, the late Bill Borne, who resigned that same year.
“It was a terrible blow,” says Netterville, a well-known Baton Rouge businessman and former managing director of Postlethwaite & Netterville, who maintains Amedisys never did anything wrong. “After Bill resigned, we began looking for a new leadership team. It took a while, and we made some missteps. But the current leadership team in place is very, very good. Paul is a great leader.”
Kusserow, a veteran in the health care industry, initially came in as a “turnaround guy” and was later asked to stay and run the company. The Amedisys board, concerned about the company’s direction, wanted an outsider to help reform its strategy. After spending much of his time interviewing frontline employees, Kusserow quickly realized what the problem was.
“The company had lost its understanding of what it was really good at,” he says.
So he helped Amedisys refocus efforts on its core purpose—caregiving.
One of the first key changes Kusserow made as the head of Amedisys was to do away with an IT platform the company was building, which was taking up a lot of time and resources, getting in the way of the company’s core business.
“Paul made the decision to pull that and get us refocused,” says Amedisys CFO Scott Ginn. “He cleared the path for us to focus on patients. That was the first piece of success. We saw quality scores rise, revitalization in the organization, and we put patients first.”
Taking care of patients, though, begins with taking care of the employees who serve them, so that is what Amedisys did. Kusserow says the company took the time to learn what its staff and its patients wanted and needed. Results followed. Employee retention, productivity and quality of care ratings rose.
“The point is, these are caregivers,” Kusserow says of his employees. “My role is to be a caregiver of the caregivers.”
With new leadership at the helm and a rededicated focus, Amedisys began to flourish again. For about four years, Kusserow says, the company grew on its own, in both the home health and hospice segments, without acquisitions.
“The business started to really perform and we ended up paying off all our debt,” he says. “We literally doubled our hospice business on our own. We had a lot of cash, no debt, so we said, ‘We better go out and buy something.’”
Last year, Amedisys bought out Christian Care at Home, Bring Care Home and East Tennessee Personal Care. Then in February, the company closed on a $340 million acquisition of Compassionate Care Hospice, soon followed by an agreement to purchase Oklahoma-based hospice provider RoseRock Healthcare. Amedisys has also partnered with tech company ClearCare to create a network of personal care agencies.
Far more acquisitions are expected in the future, largely due to industry regulatory changes on the horizon that will push out smaller companies. Amedisys has its sights set on some 2,000 mom-and-pop home health targets around the U.S.
The only issue holding providers like Amedisys back is the government, which, company officials and analysts say, prioritizes other other health care institutions over home health.
“The issue is the government, CMS, is still several decades behind,” Kusserow says. “People are different now in the way that they are sick.”
It used to be that people had an acute, episodic event or disease and would die relatively quickly. Today, though, people can live for years with diseases, and they don’t want to do it at the hospital. Kusserow says he’s optimistic the government will soon get on board.
Despite the rapid growth, and the opening of an executive office in Nashville—a national health care hub—in 2015, Amedisys officials say they remain committed to its roots in Baton Rouge, where Borne founded the company nearly 40 years ago.
“We have a lot of employees who have been with us here for 20-plus years,” says Ginn, who lives and works in Baton Rouge. “The knowledge base we have here is strong. That’s important. We have meetings here and bring in tons of people. The Renaissance (hotel) likes us a lot.”
The city is essential to Amedisys, Kusserow adds, because “you can’t buy that sort of atmosphere, culture and dedication built over 40 years down in Baton Rouge.”
Being home to one of the largest home health corporations in the nation is something Baton Rouge wouldn’t want to lose, either. And those from Baton Rouge who have seen Amedisys through its resurgence, like Netterville, couldn’t be prouder of what it’s become.
“I’m thrilled obviously. It’s been a wonderful ride,” Netterville says. “We’re in a good place.”