Q1 2021 Chemed Corp Earnings Call
Good morning, Thank you for standing by and welcome to the Chemed Corporation first quarter 2021 earnings Conference call.
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Please be advised today's conference is being recorded if you require any assistance press star zero from the operator I would now like to hand, the conference over to Sherri Warner with Investor Relations. Please go ahead ma'am.
Good morning, Our conference call. This morning will review the financial results for the first quarter of 2021 ended March 31, 2021 before we begin let me remind you that the safe Harbor provisions of the private Securities Litigation Reform Act up 1995 apply to this conference call during the course of this.
The company will make various remarks concerning management's expectations predictions plans and prospects that constitute forward looking statements actual results may differ materially from those projected by these forward looking statements as a result of a variety of factors, including those identified in the company's news release.
As of April 27, and in various other filings with the SEC you are cautioned that any forward looking statements reflect management's current view only and that the company undertakes no obligation to revise or update such statements in the future. In addition management may also discuss non-GAAP operating.
<unk> results during today's call, including earnings before interest taxes, depreciation and amortization or EBITDA and adjusted.
A reconciliation of these non-GAAP results is provided on the company's press release dated April 27, which is available on the company's website at Chemed Dot Com I would now like to introduce our speakers for today, Kevin Mcnamara, President and Chief Executive Officer of Chemed Corporation, Dave Williams executor.
Vice President and Chief Financial Officer of Chemed, and Nick Westfall, President and Chief Executive Officer of Chemed to VITAS Healthcare Corporation subsidiary I will now turn the call over to Kevin Mcnamara.
Sherry.
Welcome to Chemed Corporation's first quarter 2021 conference call.
I will begin with highlights for the quarter and David and Mick will follow up with some additional operating detail.
We will then open up the call for questions.
At the outset, I would like to say, although I'm very gratified by the company's results from the first quarter comparisons to the pandemic year of 2020 are analytically difficult.
Pandemic clearly disrupted the hospice industry. The U S government stepped in to help with the relaxation of sequestration and several other operational modifications.
The net effect of the pandemic on the government's actions was to allow VITAS to report an increase in adjusted net income of 25, 7% from 2020.
But VITAS had on patient base, and which median length of stay fell to 11 days.
The most complex issue is still facing VITAS is the disruptive impact of the pandemic has had on traditional hospice referral sources and low occupancy in senior housing.
This disruption continues to impact our admissions and traditional patient census patterns, Fortunately admissions and hospitals have largely normalized and some of our senior housing referral sources are beginning to show improvement in occupancy and related referrals.
I firmly believe senior housing will recover however, senior housing is in the early stages of recovery.
Not having enough data points to accurately predict when senior housing referrals were returned to pre pandemic levels, but that said VITAS is performing in line with our previous guidance.
Roto Rooter operating results continued to be exceptional strong residential plumbing and drain cleaning demand has been more than adequate to compensate for the slight weakness we continue to observe with our commercial accounts.
We have now had three consecutive quarters of record demand for our roto Rooter residential services.
Total revenue totaled $144 million from the first quarter of 2021.
An increase from 32%.
When compared to the prior year quarter, and a seven 2% sequential growth when compared to the fourth quarter of 2020.
Commercial revenue totaled $46 $9 million in the quarter and eight 4% decline when compared with the first quarter of 'twenty 'twenty, although our commercial demand have not yet normalized pre pandemic levels. This decline has shown significant improvement when compared to the commercial units per unit revenue declines.
On a 29, 1%.
11, 6% a nine 8%.
The second third and fourth quarters of 2020, respectively.
Aggregate Roto Rooter activity, which includes branch operations independent contractors as well as franchise fees and product sales Roto Rooter generated consolidated first quarter 'twenty revenue of $212 million, an increase of 18, 9%.
With that I would like to turn this teleconference over to David.
Thanks, Kevin.
Let's turn to VITAS segment first VITAS.
<unk> net revenue was $316 million in the first quarter of 2021, which is a line of six 5% when compared to the prior year period.
This revenue decline is comprised primarily of a seven 1% decline in days of care.
Our days of care was negatively impacted 111 basis points by the 'twenty 'twenty leap year.
Our first quarter 2021 revenue included a geographically weighted average Medicare reimbursement rate increase including the suspension of sequestration on may 1st on 2020 of approximately two 8% offset by acuity mix shift, which reduced revenue by approximately $9 $1 million or two 7% in.
The quarter when compared to the prior year revenue and level of care mix in.
In addition, the combination of a lower Medicare cap and other contra revenue changes offset a portion of the revenue decline by approximately 50 basis points.
Our average our average revenue per patient per day in the first quarter of 2021 was $198.95, which including acuity mix shift is basically equal to the prior year period.
Reimbursement for routine home care and high acuity care average $170.14.
And $991.77 respectively.
During the quarter high acuity days of care were $3 five per cent of our total days of care 71 basis points less than the prior year quarter.
In the first quarter of 2021, VITAS accrued $1 $5 million in Medicare cap billing limitations. This compares to a $2 $5 million Medicare cap billing limitation, we recorded in the first quarter of 2020.
Of VITAS has 30 Medicare provider numbers 27 of these provider numbers currently have a Medicare cap cushion of 10 per cent of greater one provider number has a cap cushion between 5% and 10 per cent. One provider number has a cap cushion between zero and five per cent and one provider number currently has a fiscal two.
'twenty, one Medicare cap billing limitation liability.
This is based on actual on Medicare revenue and admissions in the first six months on the Medicare cap fiscal year.
VITAS is first quarter 2021, adjusted EBITDA, excluding Medicare cap totaled $58 $3 million in the quarter, which is a decrease of three 3% adjusted.
Adjusted EBITDA margin on the border excluding Medicare cap was $18 four per cent, which is a 66 basis point basis point improvement when we compare it to the prior year period.
Now, let's turn to Roto rooter.
Roto Rooter generated quarterly revenue of $212 million in the first quarter of 2021, an increase of $33 $7 million or 18, 9% over the prior year quarter.
As Kevin noted earlier total Roto Rooter branch commercial revenue totaled $46 $9 million in the quarter, a decrease of eight 4% over the prior year.
Aggregate commercial revenue decline consisted of drank leaning revenue declining five 8% plumbing revenue.
Declining, 5% and excavation declining 19 five per cent.
Water waste water restoration for commercial increased eight eight per cent.
Our total Roto Rooter branch residential revenue in the quarter totaled $144 million, an increase of 32% over the prior year period.
This aggregate residential revenue growth consisted of drain cleaning increased 29, 5% plumbing, expanding 34, 9% excavation, increasing 35, 8% and water restoration, increasing $28 seven per cent.
We anticipate providing updated 2021 earnings earnings guidance in July of 2021, as part of our second quarter 2021 earnings press release.
I'll now turn this call over to Nick Westfall, President and Chief Executive Officer of our VITAS subsidiary.
Thanks, Dave.
In the first quarter, our average daily census was 18050 patients a decline of six 1% over the prior year as Kevin discussed earlier. This decline in average daily census is a direct result of the disruptions across the entire health care system that impacted traditional admission patterns into hospice starting in March of 2002.
'twenty.
Our hospital generated admissions have largely normalized pre pandemic levels. However, referrals from senior housing, specifically nursing homes and assisted living facilities continue to be disrupted.
As Kevin mentioned, we have seen stabilization in pockets of improvement in senior housing admissions. However, it remains too early to reasonably project the pace on timeline for senior housing admissions to return to pre pandemic levels.
In the first quarter of 2021 total emissions were 18135.
This is a two five per cent decline when compared to the first quarter of 2020.
However, these 18135 admissions in the first quarter of 2021 compare favorably to the sequential admissions of 16822, 17973 and 17960 in the second third and fourth quarters of 2020.
In the first quarter, our homebase pre admit admissions decreased one 5%.
Hospital directed emissions expanded two 4%.
Pursing home admittance declined 26, 2% and assisted living facility admissions declined 13, 1% when compared to the prior year quarter.
Our average length of stay in the quarter was 94.4 days. This compares to 97 days in the first quarter of 2020 and 97 two days in the fourth quarter of 2020.
Our median length of stay was 12 days from a quarter, which is two days less than the 14 day median in both the first quarter of 2020 and the fourth quarter of 2020.
Before I turn this call back over to Kevin I wanted to again, thank our VITAS team for their continued commitment and perseverance and providing high quality of care to over 90000 patients and their families. Since the start of the pandemic.
With that I'd like to turn this call back over to Kevin.
Thank you Nick.
I'll now open this teleconference to questions.
And as a reminder, if you would like to ask a question. Please press Star then one on your telephone keypad.
That is star one to ask a question.
And our first question will come from the line of Joanna <unk> with Bank of America.
Thank you good morning. Thank you so much for taking that question.
So just I guess I missed this.
This last comment about the admission patterns.
From these different referral sources, so can you repeat that and I guess.
Oh, So can you talk about kind of you know how this progressed through the quarter you know just thinking about.
Because to your point you know we've seen some pockets of improvement when it comes to Dan that falls from a senior housing I guess normalization hospitals. So can you talk about kind of how that's trended over the quarter. You know say you know January and February and March.
Just thinking about you know these referral sources.
Your line I'm going to turn it over to Nick in a minute here, but just I just want to put it in a general context, what we saw during the pandemic was senior housing was particularly affected that is.
But and I'll focus on Florida for a minute, but in Florida.
Specifically.
<unk>.
Nursing home.
Nursing home admissions that is people going into nursing homes for obvious reasons were falling.
Activities in nursing homes.
Curtailed.
The access to the nursing homes by family and our caregivers was severely restricted.
Which also meant that it was impossible to talk to people the families of people who occupied senior housing who we're generally interested in hospice, but had no no face to face access with <unk>.
VITAS over other hospice providers.
During that period.
Net effect is that you know are our.
The hospice admissions that we were getting.
We're largely coming from a more more than normally from hospital discharge planners channel.
Short length of stay let's say.
Average length of stay from 30 or less from that type of provider.
Provider.
And the.
The net effect is we saw our medium length of stay just consistently fall during the period. So that's a general context, which I know you understand I'm going to turn.
Turn it over to Nick can say, if he's going to give you the numbers and saying, we're observing that but its out of our hands in many respects the we need all of those things to happen.
Occupancy in senior housing isn't going to return.
To pre pandemic levels until all of the activities. They have all the visitation to have all those services are available I think.
Those are.
The vaccinations those are coming in large measure, but the timing of which is outside of our hand in hand, So we don't really make a.
We don't make any projection of it but joanna.
Requests when.
To repeat the numbers that could go on but I just wanted to put it in that context. So don't want on in terms of the first quarter just real fast the homebase pre admits were down one 5% hospital was up 2.4 nursing home was down 26.2, and assisted living was down 13.1 on the other additional comments to piggyback on.
On.
What Kevin was articulating if you go to the non nursing home senior housing segments a L. S. On other sub components throughout the quarter. There was some evidence in certain states and pockets of ongoing improvement, but it's very early in those trends in it it's why the macro comment.
Of continuing to observe ensure we're there to support as well as analyze all available information both internally as well as externally.
Impacts are forecasting that we'll come out with and continue to provide further granularity on as was alluded to in our comments at the.
Into the second quarter.
Alright, so I guess, what you're saying so on the 13th against the client their interest and the claim free living this day like the exit rate in March was better than that.
Yep.
Theres progression throughout the course of the quarter, but with the volatility and it's really market specific on when I say markets is local but also on a state level as well.
There's there's a lot of things that impacted not to state the obvious and you know where the state is and have a comfort level with the community for non only.
Safety and all the other social components that Kevin was talking about really influence.
Not on the occupancy, but also net new lives coming into those settings as opposed to leaving those settings as well that has.
But as consideration towards how many new referrals, we get from those settings as opposed to the ability for us to continue to access existing patients in those settings to provide care.
Right so on that last point.
So is there kind of all clear are there still markets, where you are not allowed to go in.
At our national Federal level, if there is an all clear component the adoption on a state by state level and particularly on a facility by facility level. Sometimes you know the pandemic has taught us a there's unique adoption, but what we've been successful in.
It is really you know and it's a macro statement, providing education differentiation and an understanding on every single one of those facilities that VITAS as a provider we show up with our staff who were committed as well as you know.
With all appropriate PPE and safety protocols to protect not only their staff, but all the residents inside of that inside of that facility. So there are still restricts answer your question I enjoyed.
It varies but there are different levels of restriction in Florida is there any nurse on where we are prohibited from being on site. The answer to that is no at this point, but theres still levels of restrictions.
And so on right.
Yes.
Alright, and I guess it also is it related on goes hand in hand with that concept on you mentioned before Kevin.
<unk> itself, just how open viscomi or 240 residents in terms of attracting new resident I guess, that's more relevant for the senior housing.
In terms of you know the social aspect of what's going on there so kind of what you're seeing there on that is that let him because it sounds to me like are you guys thinking that that that's part of that long term care, it's going to be the area, where the improvement will be you know.
Current cash did in nursing homes. So can you talk about you know kind of specifics.
Specific senior housing any any indications there on the how does this compare with nursing homes.
There are four things actually tracking right with their occupancy and buy from us from them to you.
Yeah.
Yeah.
Not too much outside of a macro level Johanna I mean.
Hesitate on some of the macro commentary because it really is unique on a community by community basis, what we're alluding to which we are consistently across.
The country and you'll see you know everyone here is inside of the earnings calls from the publicly traded companies is it's not only a safety perspective. It is not only an access perspective, but it also is the evolution back towards you know the new residents and the attractiveness and comfort level for those residents and their families to place their loved ones in that.
Setting of care too.
Continue their their care continuum to meet their care needs on a go forward basis, and that's going to take some time to continue to evolve and it's something we're looking at and being there in lockstep as a partner to help support you know on.
On a daily basis.
I think maybe one element of your question is.
We don't have and we don't rely on any information on based on our observation of whats going on in senior housing, it's too diffuse we rely on the kind of things you would probably would look at.
Industry reporting, which the problem with that is there's a lag.
Right.
The actual situation to the reported numbers. So we were looking at the same numbers you might look at it if you're looking at those numbers and the problem is there's a lag.
And when we don't have enough data points to suggest that we're really a reliable indicator of something else or a precursor to what's going on but directionally to reinforce kevin's comment when he opened the call we feel confident in the in the rebound, it's a matter of just timing and trajectory.
Right and I agree with that and also I guess this is just a portion of your on trolls sources in the hospital before it seems like stabilizing there.
Theres activity coming back to the hospitals.
But it also Curt can you talk about kind of your strategies to round down.
Going after it and you work from all sources more from physicians, because I guess you'd be genius or not.
Institutional settings, there somewhere else on like the home.
So kind of ease their strategy to access and educate these patients where they are.
We pivoted that strategy in the Middle you know the early part of the pandemic last year, we we will moderate proactively and reactively of where we focus our educational needs based upon where patients are accessing the health care system and so that piece of the pandemic has taught us in quick order is position on.
<unk> became the first point of a lot of that access where may maybe they went to other avenues in the past and so we have doubled and tripled down our efforts are continuing to support that enbridge and grow those relationships and it's going to it's going to be an important factor for us on a go forward basis that hopefully there's a stickiness towards the.
Chip, we established on the confidence of those physician offices now have in VITAS.
To provide high quality care to the patients that there are they're seeing that are appropriate and eligible to receive hospice services.
And I guess just to close that loop.
In terms of debt guidance for the year, so you're saying that.
You don't have you're not just a body on that on davita side to adjust the guidance <unk>.
Just a question that sequestration.
Relief extension on you guys talk about this being like a 6 million per quarter benefit is that right way to think about it probably like three quarters. This year right.
Yes that would be correct as well as we anticipate lower cap than we originally anticipated, but again. The key is can also be it on the trend line of recovery of senior housing. So we really do need three more months of data points to be able to give accurate projection for the second half of 2021.
As a company policy we.
We just give guidance.
We reported earnings from the previous year, when we say, we just kind of go dark on guidance.
Till the end of the second quarter, but just.
Just something dramatic has happened that's just that's just our company policy.
Trying to avoid situations reported quarterly guidance.
Alright, because that day at my last question sorry.
In terms of Roto rooter right on that.
That segment that are much better than them.
And we were modeling and it sounds like also better than what you were expecting.
The revenue growth I guess much greater than our guidance the prior guidance for the year. So can you kind of saying to us.
The drivers for that and how sustainable.
That strength in Q1 was thank you.
And Joanne I do appreciate the question, but we really at this point, we'll address guidance on a go forward basis, certainly we saw strong momentum in Q1.
As well as it is across the board on residential in and all four critical area. There's still we're talking plumbing rank line in water restoration and excavation.
But we will update the guidance in July, but without a doubt momentum seems to be have the even strengthen from the fourth quarter of 2020, and we'll talk about this more in detail and in July after we released our second quarter earnings.
And I guess, so you're saying kind of the.
The weather.
Unusual weather in some of the parts of the country in March that that wasn't a big part of.
Yeah, I don't think it was.
Sometimes we run into.
A polar vortex or something in it.
It causes huge problems I think that.
Absent something like some other Texas markets, where they had.
Crazy weather.
<unk>.
And freezing temperatures for extended periods of time.
There was less weather related.
You know things this year than maybe a typical.
Winter period. So it was just strong as the.
Sure.
We've been asked this many questions do we think that what is the.
Is the fact that the pandemic has people at home more than they have been focusing more on.
On.
Getting things fixed at their home.
Faster and more completely maybe we just know that the phone is.
It was ringing off.
Off the hook and really if you talk about when we talk in terms of sequential growth for roto rooter sequential growth.
Given where we are.
To say that.
Our advertising reach.
Through Google and the Internet is such that we have a competitive advantage on the phone is going to be right.
The sequential growth is going to be depend on adding more skilled manpower, which is a constant battle.
The success on the in the quarter is an indication that they that roto rooter was able to do that.
And you.
Sequential growth will tied to continued success of that work in that regard. So it's hard to say I can't really give it.
Clear description of why it's happening other than the phone is ringing and our job is to get an ever expanding work force out to answer those calls.
Alright, so all on.
I guess I'll go back to the queue. Thank you.
Once again to ask a question press Star then one on your telephone keypad and our next question will come from Frank Morgan with RBC capital markets.
Good morning, I hopped on late so apologize if this one was already asked but as I looked at your results. It looked like cost management was really.
Extraordinary nice margin expansion, so I'm just curious.
How much room is really lift in terms of productivity management or anything else youre doing on the cost side or from here.
It really more just a function of seeing a recovery in the in the top line growth again, and then my second question and I'll hop is.
Obviously came in on announcing that they are up.
Pulling in the kindred at home piece since spinning off hospice as a separate company just any commentary about what you think that means for the industry.
How often do you see them in the marketplace and do you think anything changes as a result of that thanks.
Thanks.
The first one Frank.
This is Nick I'll take it yeah. The answer is sort of the same as it has always been its always going to be a combination right of not only managing growth from.
Add minutes, but also you know ongoing expansion of median length of stay in days of care that comes with that and continuing prudent.
Cost control measures.
And the two actually go hand in hand, meaning as we continue to bring on more patients and find available staff as we look for not only efficiencies, but really full utilization of all of our clinical disciplines to provide that care.
Like every hospice organization, there's always opportunities for continued growth there and evolution of that as well as leveraging to complement but not replace some of the relaxation of the government has appropriately put in that really elevate care like telehealth provisions. So that's really.
On the opportunity for us.
Really further elevate our engagement with the families as well as the patients and balance out the physical needs as well as the.
The remote or.
Quick question needs debt debt.
So we've been figured out how to navigate throughout the course of the pandemic. So it really is the ongoing combination of growth while staying on top of it is not cost control, but it's prudent utilization of all the dollars on which we receive reimbursement for like would you say Nick there was on productivity improvement as well as you had scarce labor you got.
More efficient throughout the pandemic and you anticipate keeping those procedures in place right. So that's what that's what we're honed in on.
Now your other question on Humana is an interesting one Frank and I would really if you think about.
On the hospice business that they effectively acquired that was largely the odyssey in debt to care acquisition that kind of worked its way through multiple acquisitions up the food chain.
And it's right honest Odyssey acquired debt to care that was all hospice and J T bar acquired the Odyssey Vista care than Kindred and then go to a humana, but it is our understanding of those we're still kept relatively separate getting a little dangerous now I'm speculating on that total integration strategy, but I think it was an easier.
Our play for them to focus on home health, but beyond that it's hard to really discern what their logic was on just taking in the home health and leaving the hospice piece, where it sat with a co ownership and Frank This is Kevin.
To show you.
This is a.
Pure speculation, but there's something in there that you have to remember that.
Hospice.
Patients coming from.
It's really hard from say is coming from a hospital setting.
Are much more likely to be short stay patients.
Much tougher to make a profit on them.
As far as the current service of them.
<unk>.
If when you're talking about.
Full service hospice, so it doesn't shocked me too much but a hospital system.
<unk> sees those elements are or.
Our hospice within their control so.
This is kind of what I, what I expect is certainly what Nick expected to see expected to have to see happen.
On the rumors so it's consistent with everything we thought was going to happen over the last four.
Last six months probably.
Frank the last comment this is Nick.
Not veer too far out from a speculation perspective, but it is something that gets discussed dialogue, whether it's V bid with CMI on a demonstration model what it what it further helps to go illustrate when you have <unk> full risk model like Medicare advantage is from an insurance plan perspective, and you couple it and try to.
About how it's gone at.
Operate with the hospice benefit, which effectively was the first full capitate it at risk model.
Clinical care considerations and everything else that goes with that goes into that and both are efficient ways to deliver.
Care to the population and so you have all of the care delivery implications that they get wrapped around that as it relates specifically to hospice that you know as home helped me migrate more and more towards that but it is still as much of a fee for service.
Volume driven component as well, even with PDGF to certain certain degree.
Sure.
Thank you.
And our next question is a follow up from Joanna <unk> with Bank of America.
Yes. Thank you so just a couple of follow ups.
Also on the admission side, you mentioned that you had a year over year comp is difficult, but on a quarterly numbers have been improving the last couple of quarters. So can you also simulate up about any any progression through the quarter in terms of admission trends.
So Joe on it Youre alluding to the quarterly wreck the sequential quarterly growth that you had alluded to in my comments on how that would have played out on a month to month basis inside of the Corp Yep.
They would say is the median length of stay actually showed a steady increase from January February to March going from 11 to 13 days averaging 12.
And the other point, we'd also like to make is at two 5% growth and admissions from hospital in Q1 of 2021 and my opinion is incredibly impressive because remember last year on the first quarter of 2020. The last two months of March hospitals, largely flushed their patients and we had an abnormally huge influx.
<unk> of hospitalized pretty adamant location for hospice patients. So the fact that we grew two 5% actually was.
Exceptionally positive for the quarter.
John on the reason why you don't really get into the monthly component of it is because you can become very scientific related how many days, which days of the week what was the concentration Monday Monday through Friday every setting has historical patterns around when we would when we typically receive referrals that are <unk>.
<unk> done on what that business model, so it's best to spread it and look at it over the course of the quarter. So we don't get into interplay of how many Fridays, where theyre in a month as opposed to debt and I would make one other comment in this milieu.
We always don't all emissions arent equal but.
On a normal situation, we just we just say well.
This is what we expect it will all come out in the wash right now we're hyper vigilant on.
On admission from various sources and less concerned with hospital admissions that is that from.
More likely to be short stay so we've now from our perspective.
Sure.
We're looking at it.
Uh huh.
Pieces on what we normally report for admission. So we're less concerned first I'll give you. An example, if our admissions from the senior housing market or total.
B strong per month in hospital admissions were too.
Our contract a bit.
We wouldnt be concerned we'd say that would be fine number one we don't have it.
We have a big cap cushion in Florida.
We'd be we'd be using our focus our sales focus on the senior housing opportunity. So.
Over the next six months or so.
The admissions number is going to be less important than it normally is from at least from our perspective.
It's where the where we're getting the admissions is more going.
There will be significant.
Alright, and just to follow up on something you mentioned about the.
I guess from.
Leaner I guess.
Labor force that their labor Force, Wisconsin, Queens Fat TBD. So can you flesh it out to Washington, Zaffino, what's happening there and kind of what implications. It has for for I guess going.
Going forward in terms of any changes you anticipate I guess this pandemic.
That's correct yes.
Beyond that well, where we are now.
So the flush out on the go forward by by nature will be incorporated into any guidance as we're anticipating that.
And you know absent spending another.
Two hours going through the dynamics of how we think about the operating model with it there. They are things that we've learned through the pandemic debt will continue to memorialize that not only make us more efficient, but also drive quality of care to the patient and family office I was alluding to.
Secondarily I know you know I don't want a discount this there are pockets and needs as we continue to not only retain our existing staff, which we've done a good job of throughout the pandemic, but also bring on at.
At the appropriate time, new clinical disciplines, as we continue to grow and get back towards a growth trajectory of the business and the difficulty in the competitive nature of identifying and being able to bring in those resources is something we're also honed in on as other health care providers and systems.
We're all competing for that same that same resource at this time, many of whom exited the health care system.
Do you know for a variety of reasons through the pointed on the pandemic and so everyone will be I'm sure speaking about and focused in on that for you know for the foreseeable future join US a lot of granular changes on Nick how many hospice teams you currently have in place 300 and 317.
Hospice teams.
And there's a lot of granular changes that individually arent much debt accumulate up to.
What we would consider on a go forward basis material productivity impact, but we really do need to wait to get to the other side of the pandemic to truly measure it.
Okay.
I understand Theres standard little changes that are kind of aggregate because I guess that was consistent with the first question about the day margin that was so strong in the quarter and just thinking about you know what it means for the future.
And I guess.
It's a high margin there's no question about it I mean, it's.
But then again I look at Roto Rooter margin so on.
27%, if you'd asked me a hum.
A couple of years ago, whether that was even possible I would've said, though so.
We have Peru has proven difficult for us to predict margin.
Because.
Everybody thinks they're doing as well as they can and just seemingly both companies have had big improvements.
Almost quarter over quarter.
It really to close on a high note and we've seen this on on multiple crises, whether it's debt.
Great recession actually weather was 90 will happen or now with a great pandemic and both roto Rooter and VITAS had every time, there's a crisis, we actually emerged better positioned and stronger post that price system, we entered into it. So frankly, we actually are.
We're exceptionally satisfied with the way our operating management team right down to the field level has reacted to these and have figured out a way to make changes to make us more productive without sacrificing quality of care or quality of the customer experience at the roto rooter level. So we think will emerge from this as well.
On much stronger than we went into the pandemic in terms of operating practices.
Clearly the margins very impressive in just the last node in terms of on.
On the hospice.
Those regulation from CMS that includes <unk>.
Quality measured at the Hospice current index and also on behalf the start star rating.
Our total with home health has so kind of how do you see VITAS position then in general kind of.
On your any high level.
Commentary from you how bad debt. Thank you.
So John we've always been.
Hesitant to comment on proposed rules until they get finalized in August I think the macro comment you know is ongoing.
Ongoing recognition on the value of the hospice benefit baked into the proposed to 3% price increase related to its work.
Encouraged to consider continue to see stability there as it relates to the evolution of how quality will continue to be defined and share. It on a public level. You know, there's there's a lot of detailed nuances inside of it but all in all you know of course, we are an advocate for the ongoing.
Wing transparency and the desire to really figure out both qualitatively and quantitatively, how hospice and quality and value to the overall system is gonna be defined and reported on a go forward basis. So it's a you know.
Non an unanticipated continued step on the right direction.
We will respond accordingly, like we always do to the proposed comments.
Great. Thank you so much for all other callers.
Thank you I would now like to turn the call over to Kevin Mcnamara for his closing comments.
Well I just wanted to thank everyone.
For their attention and their questions and we were as I mentioned earlier gratified with the results.
On the first quarter are still difficult.
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I, thank everyone for listening in.
At the end of the current quarter. Thank you.
Once again, we'd like to thank you for participating in todays Chemed Corporation first quarter 2021 earnings Conference call you may now disconnect.
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