Q2 2021 Amedisys Inc Earnings Call
And there is no.
That is name of <unk>.
For the loser.
The later win.
And in.
And then.
[music] from Senators congressmen and Vesey the call.
Those are the way the lack of the Oh, he did get hurt moving.
He who has stopped all of them.
Yeah.
Greetings and welcome to the of Medicines Q2, 2021 earnings Conference call. At this time all participants are in a listen only mode. A brief question and that discussion will follow the formal presentation and how do you want to.
Should require operator assistance during the conference. Please press star zero on your telephone keypad.
And as a reminder, this conference is being recorded.
And it's now my pleasure to introduce your host Nick Muscato.
You may begin.
Thank you operator, and welcome to the of medicines Investor Conference call to discuss the results of the second quarter ended June 30th 'twenty 'twenty 1.
A copy of our press release supplemental slides and related form 8-K filing with the SEC are available on our Investor Relations page on our website.
Speaking on today's call from of medicines will be Paul Kusserow, Chairman and Chief Executive Officer, Chris Gerard President and Chief operating Officer, and Scott Ginn Executive Vice President and Chief Financial Officer.
Also joining us is Dave Kimberly Chief legal and Government Affairs Officer.
Before we get started with our call or like to remind everyone that statements made on this conference call. Today may constitute forward looking statements and are protected under the safe Harbor of the private Securities Litigation Reform Act.
These forward looking statements are based on information available to of medicines today the cash.
Company assumes no obligation to update information provided on this call to reflect subsequent events other than as required under applicable securities laws.
These forward looking statements may involve a number of risks and uncertainties, which may cause the company's results or actual outcomes to differ materially from such statements. These risks and uncertainties include factors detailed in our SEC filings, including our forms 10-K, 10-Q and 8-K.
In addition, as required by SEC regulation G. A reconciliation of any non-GAAP measure mentioned during our call today to the most comparable GAAP measure will also be available and our forms 10-K, 10-Q and 8-K.
Thank you and now I'll turn the call over to of Madison's, Chairman and CEO Paul Kusserow.
Thanks, Nick and welcome to the <unk> 2021 second quarter earnings call. We have a lot to discuss on today's call, but before we dive in and I want to express my sincerest appreciation to all 21000 of medicines for employees that have helped navigate.
Again, the company through on the operating environment. Unlike any other in history over the course of the last 16 months.
Covid has changed how we do business impact of the that's all and continues to threaten us with the surging Delta variant.
It has been and still is all hands on deck and all along our indefatigable and undaunted caregivers have been on the front lines, providing the industry's highest quality care to the nation's most frail population.
Financial results of our important of course, but our first priority is always patient care.
Don't want anyone to lose sight of just how heroic these efforts have been and even though COVID-19 is an obstacle we are dealing with daily your unrelenting quest to care for your patients has always been truly inspiring.
And for all of that you do I'm extremely proud of what this company does every day.
With that I will dive right into a few developments that have taken place over the course of the second quarter, and then I'll turn it over to Chris Gerard to walk us through the second quarter operational update.
Since our last call there has been a flurry of activity highlighted by the signing and closing of Contessa I am happy to announce that the deal closed August 1st and I want to take a moment to welcome all of the Contessa associates to the <unk> family.
The leader in its space Contessa as a risk bearing tech enabled hospital at home and sniff at home platform..1 that of medicine will continue to invest in and for future growth and contestants current lines of business, but also for new growth into the new areas of care.
We're in the home such as palliative care and primary care and expanding their technology base to allow for even more and new cross functional risk arrangements across the home health spectrum.
Contessa also adds significant capabilities to of medicine, such as a new Medicare advantage focus claims payment and risk analytics platform.
Other strategic benefits from this acquisition include the addition of higher acuity Homebase care to our current service level offering allowing of medicine to create their premier home based health system with the broadest reach and the industry.
It also brings significant expansion of <unk> total addressable market of the Tam of in home care services from 44 billion to $73 billion, but more importantly, this allows us to deliver more care to a broader spectrum.
Of people in their homes.
It also expands our Madison is home health and Hospices MA pipeline to include new or enhanced joint ventures, and acquisitions with partner Health systems.
It accelerates admissions expansions and growth opportunities for our core of <unk> home health and hospice businesses to seek care coordination and preferred provider arrangements with current and future hospital at home and significant hospital partners.
We are thrilled to get this deal closed and we're already working hard to capitalize on the tremendous growth and new frontier opportunities for <unk> and Contessa.
On the Legislative front on June 28, 2021, CMS issued the 'twenty 'twenty 2 proposed rule for Medicare home health providers.
<unk> estimates that the proposed rule will result in a 1.7% increase and payments based on our preliminary analysis of the proposed rule, we expect our impact to be slightly higher than the industry average. The proposed rule also provides for the.
<unk> of the home health value based purchasing model to all 50 States beginning January 1.2022 with calendar year 2022, being the first performance here and calendar year 2020 for the first paint.
Mid year with a proposed maximum payment adjustment or penalty of 5%.
We are pleased to see the nationwide expansion of the BP.
Given our top ranked composite stars of for 3.3 and that over 99% of our care centers have of stars score of 4 or better and our advocacy of these of efforts with CMI for 2 years, we are excited but CMS.
<unk> announced this expansion of the BP.
Also on July 29th CMS issued the final payment rule for Medicare hospice providers for the fiscal year 2022.
Factive for services provided beginning October 1.2021.
And <unk> estimates that the final rule will result in a 2% increase and payments to hospice providers. We expect the of medicine specific impact to be in line with the industry.
As you can see a lot has transpired.
Throughout the second quarter and externally within our business.
I'll now turn the call over to Chris Gerard to give us a rundown of our operational performance during the quarter and our projections for the year ahead.
Chris.
Thanks, Paul.
Now, let's review our second quarter results by line of business, starting with home health.
<unk> continued its extremely strong performance again this quarter growing total volume of about 12% and total admissions by an impressive 20%.
As you know Q2, 'twenty was most heavily impacted quarter due to COVID-19.
And even though the year over year growth for suppressed and the second quarter of last year performance in Q2, 'twenty 1 was very impressive.
For the quarter, we performed and $14.2 visits per episode.
The 3 visits sequentially and down $1.2 visits year over year.
We remain very comfortable with our VP levels as we have seen strong increases on our quality scores.
As a reminder, we have consistently stated we will never do anything to impact all of these scores and and given our continued improvement and whole milk quality scores along with the decreased business per episode for delivering on that promise.
On the clinical mix in Q2, we achieved 47, 5% LPN utilization.
And 52, 9% PTA utilization.
As business per episode and have come down.
All of them to increase our LPN utilization as we can.
From more challenging power.
However, there is still room for improvement.
We also saw year over year productivity improvements and a homebuilder clinical staff performances.
And as visits per episode per FTE increased over 1%.
The increase productivity combined with decreased visits per episode increases our capacity.
Which will be key to our future growth opportunities.
I want to once again call attention to how strong performance has been and our home health segment.
On the admission growth and margin growth home health is really been hitting on all cylinders.
Thank you for all of our whole Walt the associates for the continued efforts to drive our business for.
Now moving on the hospice.
For the quarter, we grew off the total lab and it's about 2%, while ADC was down 3%.
And like home health, the saw very sharp impact and steep rebound from Covid and 2020 the.
The COVID-19 impact and will rebound and cost which has been slower to develop and as it has impacted the business into 2021 and multiple ways.
As you may recall at the beginning of the year, we got it to a total admissions growth target of 18%.
In order to achieve the needed to execute on the phone.
All of our hospice BD Ftes from 476.
And the year to $5.28 by the end of the symbol, while growing our BD FTE productivity from about $8.7 per.
The month to wait till the referrals per month.
Our initial projections for appropriately aggressive and then.
Executing some of Colo.
And the data points.
I'll share of the path to 18% ambition score.
Well, what we did not expect and the reasons, we're layering on more conservatism to our revised guidance, which Paul.
And the resurgent impacts of Covid overhaul since the spin.
And specifically some of the significant impacts were as follows.
The decline and continue to suppress the occupancy rates and senior living facilities.
The major reform swarms of accounted for over 25% of all of these holes.
Occupancy pressures continues to be of homeland.
And we're having today, especially with the bulk of the variance surgery.
Moving to a higher probability of occupancy.
And significantly lower throughout the remainder of 2021.
Covid patients on service significantly impacted the median length of stay.
And part of the year volume May add and 18 days versus 26 days pre COVID-19 and 32% decline.
Excess deaths and do we want to cover the <unk> won't shrink admission of opportunities.
And finally, we saw a significant increase in hospice the FTE turned out the partially driven by Covid burnout and the.
Change in human behavior, which many other industries, you're seeing particularly on the BD staff.
We continuation of Covid impacts into the back half of 2021 were not baked into our original guidance clearly and perhaps the only to achieve on previously projected growth targets.
Some of you the impacts have been out of our control.
There are efforts and in place internally to help drive growth and the second half of the year.
And so I described above.
And no systemic issue for unresolved problems with the hospice business.
Clinical quality and operations of 5 and performing like we would expect and in most cases better.
Consistent growth through the pandemic has been our single zone.
On a recovery comes down to 2 points.
The staff.
And retaining those.
If that sounds familiar and should.
As it is literally the exact same strategy, we put in place to grow of home health business in 2017 and.
<unk> delivered the results from the suite today.
The strategy is not overly complicated and it works, we have proven that and the past.
So here's what we're doing.
We'll go on back to our basic strategy, the sort of hospice segment doublets ADC organically from 2015 to 2019.
We have added to our recruiting staff and have the team focused 100% on recruiting costs with BD team members.
And no 1 has come later in the quarter, we made progress and ramping up the <unk>.
Tvs.
And we have invested and the hospice BD leadership structure, adding the vps of BD AVP of BD and field trainers to help provide oversight and drive the rep retention and productivity growth.
We have set the policy, new quality and growth tools and the field.
Putting the Metalogic switch program, which identifies patients currently on home health that may be and maybe the cautions and.
And net news program, which will give our referral sources better insight into the quality of care and provider of patients.
And as we continue to move our beauty leadership and BD staff back into the field, we will return the in person training and a lot of logs.
Yes in person on the job training was lost during the Covid as we moved to a virtual environment.
And it will surely pay dividends as we have numerous new BD reps, many of whom have yet to meet their manager and person.
And it's tough for us to rebuild our community and hospital heart philosophy, which will impact of during the pandemic.
Again, there's nothing overly complicated here.
All of these activities will result in stronger growth the remainder of the year. We have a plan of what we can control internally identified and we'll execute and deliver on the numbers you see today.
With that I'll turn it over to Scott, who will take us through a more detailed review of our financial performance for the.
Quarter, and our projections for the remainder of the year Scott.
Scott.
Thanks, Chris I am pleased with our second quarter financial results. The second quarter of 2021 on a GAAP basis, we delivered net income of $2.43 per diluted share on $564 million of revenue a revenue increase of $79 million or 16% compared to 2020 is.
As a reminder, we have chosen the prior cares act funds and went to direct costs associated with COVID-19. The majority of these costs are included in cost of service.
For the quarter, our results were impacted by income or expense items adjusting our GAAP results that we have characterized as non core temporary of onetime in nature slide 15 of our supplemental slides for provides detail regarding these items and the income statement line items each adjustment impacts.
You'll note that the adjustments include the recognition of cares act funds and direct costs associated with COVID-19.
Additionally for the second quarter 2021, our GAAP results include the.
$30 million gain on our investment and Metalogic as well as the first of all of the $6.5 million reserve for the Doj matter, which was closed during the quarter.
For the second quarter on an adjusted basis, our results were as follows.
Revenue grew $73 million or 15% to $558 million EBITDA.
EBITDA increased $17 million or 26% to for $84 million.
EBITDA as a percentage of revenue increased to 130 basis points to 15%, representing our highest EBITDA margin and recent company history and.
And EPS increased 35, or 26% to $1.69 per share.
Significant items impacting our Q2.2021 consolidated results are as follows the.
And the suspension of sequestration and rate increases added $13 million to revenue and gross margin improvement and the home health revenue per episode of reduction of business, perhaps zone and improvement clinician and utilization drove a 320 basis point improvement and home health gross margin and the <unk> acquisition contributed 25 million and.
The revenue, which represents a $16 million increase over prior year.
Now turning to our second quarter adjusted segment performance.
Keep in mind segment level EBITDA is pre corporate allocation.
And home health revenue was $349 million up $59 million of 20% compared to prior year driven by same store total admissions growth of 20%.
Revenue per episode was up $168 or 6% the Inc.
Kris and revenue per episode results of of 1.9% increase and reimbursement.
1 additional month of the suspension of sequestration.
The decline in lupus, resulting from missed visits related to COVID-19, and prior year and increase and the function of payment of our patients.
And the change and the timing and geographic dispersion of our patients.
Our implementation of Metalogic care has led to a reduction of $1..2 visits per episode, while we continue to improve on our quality scores.
Visiting clinician cost per visit increased 8% over prior year.
The increase was driven by planned wage increases and an increase of new higher pay.
Significant increase and the utilization and rates of contract conditions, driven by growth and COVID-19, and higher insurance costs.
Our gross margin improved 320 basis points, despite the 8% increase and cost per visit.
And the improvement was driven by a 6% increase and revenue per episode of.
And our significant progress on clinical staffing mix and utilization and the variable nature of our business model, which benefited from significantly higher volumes.
G&A increased approximately.
$10 million, mainly driven by lower spend in Q2.2020 related to COVID-19.
<unk> higher health insurance costs increases and care center administrative staff and business development resources and investments delayed the PDGF.
Segment, EBITDA was $80 million up $27 million with an EBITDA margin of 22, 8%, representing a 450 basis point improvement.
Sequentially segment, EBITDA was up $9.1 million driven by strong admissions and the $55 of increase in revenue per episode.
Now turning to our hospice segment results for the second quarter revenue was $191 million of $14 million over prior year and increase of 8%, which includes the addition of the <unk> acquisition, which closed on June <unk> of 2020.
Net revenue per day was up 2% driven by an additional month of the sequestration suspension and the 2.4% hospice rate increase that went into effect October 1.2020.
As Chris discussed.
Admissions grew 2% and ADC declined 3% as the lingering impacts of Covid and business development staff turnover impacted growth.
Fastest cost per day increased $6.15.
Primarily due to the raises health insurance costs higher business performed by our employees as prior year was impacted by ex access restrictions due.
Due to Covid and higher transportation costs.
EBITDA was 40 million down approximately $6.5 million a decrease of 14%.
The <unk> acquisition added incremental revenue of $16 million and EBITDA of $3 million for the segment's performance this quarter.
G&A increased 8 million largely driven by the <unk> acquisition, and an increase and travel and training.
Sequentially segment, EBITDA decreased $7 million, primarily due to an increase and health insurance cost revenue adjustments business development additions and travel and training.
Turning to our total general and administrative expenses on an adjusted basis total G&A was $171 million of 37% of total revenue, which is an increase of $20 million year over year and includes $5.5 million and additional costs related to this air care acquisition.
The increase reflects the slowdown in prior year's spend due to the COVID-19, and higher health insurance costs raises additional business development resources and operational support and investments related to PDGF and offset by decrease in incentive accruals.
We continue to generate impressive cash flow and the second quarter, producing 68 million and cash flow from operations.
Cash flow from operations was the have entitled projections due to strong cash collections.
Year over year, our DSO increased 7 days and was down 1.2 days sequentially.
As a result of our continued strong cash flow of net leverage ratio at the end of the quarter was 5 times.
Turning to M&A on May 1st require the regulatory assets of of home health provider and Randolph County, North Carolina, We started Q3 off with an increase and M&A activity as well and in addition to the closing of contests on August <unk>, We acquired visiting Nurse Association of home health and hospice provider with locations in Nebraska, and Iowa on July.
<unk> and we closed on the acquisition of of our C O N and Westchester County, New York will July 12.
We also announced that the board of directors has a proven and additional $100 million of authorization for stock repurchases, which we will deploy opportunistically, let's add to the 26 million remaining from our previous authorization.
Neither of the contest the deal nor of the stock purchase stock repurchase authorization impact of our ability to acquire additional home health or hospice assets.
In connection with the closing of the contest of acquisition. We've also closed on the <unk> The amendment and extension of our credit facility.
Under our new 1 day and senior secured credit facility will have a $450 million term loan and of $550 million revolver, which will be used for continued core business inorganic growth.
Thank you for our banking partners led by Bank of America for the seamless execution on this extension.
Finally, as you can see on page 23 of our supplemental slide deck, we are updating our guidance ranges for 2021.
This updated guidance reflects the lingering effect of Covid and the impact of its resurgence of our hospice business.
Our core business guidance range as our adjusted revenue of.
223 to $2 billion to $5 billion and.
Adjusted EBITDA of $3.15 million to $320 million and adjusted EPS of $6.37.
The $6.49.
Including the impact of acquisitions, primarily contessa and the VNA. These ranges are adjusted revenue of $2.2 4 to $2.6 billion adjusted.
Adjusted EBITDA of $301 million to $308 million adjusted EPS of $6.3 to $6.18.
Our performance of the first half of 2021 and produced strong EBITDA.
And expanded margins and the hospice growth was behind our projections, where we were confident and our outlook given the recent starches and COVID-19.
The difficulty is growing our BD staff, and Q2 and uncertainty around how state facilities and referral sources and react we feel it prudent to adjust our 2021 guidance range is down.
The key drivers of the reduction in guidance of primarily production and our second half hospice admit and ADC growth continued in April for the utilization of the contractors and higher health costs.
Throughout 2020 and into 2021 way.
We have and mindful of our need to deliver results and we manage costs aggressively after facing top line pressures.
However, with our recent acquisition activity, we still believe that there is a significant opportunity to grow our hospice segment, which has required us to invest and leadership and continue the higher clinical employs the support this future growth accordingly, and given that our hospice growth disruption has been isolated the turnover and hiring is not a systematic issue.
We're committed to staffing of our hospice segment for this growth opportunity despite the impact of near term margins.
COVID-19 has impacted the operating metrics typically used to forecast both growth and cost of substance for both core and medicines and Contessa.
We are basing our guidance on our current operating environment COVID-19 continues to evolve and both of the disease itself as well as disruptions for the health care systems and the economy.
Any future regulations are government interventions spiked inclinations, and BD staff on quarantine production and elective procedures change of patient behavior and.
And further decline and senior living occupancy could impact our ability to achieve this guidance.
I'll now turn the call back over to Paul to conclude Paul.
Thanks, Scott as you can see the unanticipated lingering impacts of Covid on our hospice segment has delayed our ability to grow at our projected forecast that said the business continues to deliver great care and generate strong margins we have.
Isolated and identified the problem to 2 areas BD turnover and hiring we've developed action plans and assigned accountability to deliver these results we are confident and our ability to deliver our second half 2021 numbers and hopefully.
And beyond.
In parallel we will use our new services via the contest the acquisition to further propel us on our path to risk and solidify our very advantageous position.
We have work to do we have made promises upon which we will deliver we are motivated excited and committed to achieving our goals. We have a good strategy and we're sticking to it. This ends our prepared remarks operator, please open the call for questions.
Thank you we will now be conducting a question and answer session and if you would.
And to ask the question. Please press star 1 on your telephone keypad and confirmation tone will indicate that your line is and the question queue. You May press star 2 and we'd like to remove your question from the queue for participants using speaker equipment and may be necessary to pick up your handset before pressing the star keys and.
The interest of time, we ask the participants limit themselves to 1 question and 1 follow up.
1 moment, please while we poll for questions.
Okay.
Yes.
Thank you. Our first question comes from Brian <unk> with Jefferies. Please proceed with your question.
Hey, Brian Good morning, guys. Good morning.
And I guess for Paul as I think about.
Your home health business, and your home nursing business did pretty well during the quarter, 20% organic growth, but obviously challenges and the occupants where you sit today how are you thinking about the long.
Getting past 2021, how are you thinking about the.
Sustainable growth rate or kind of if were looking at on an EBITDA growth outlook for say the next 2 to 3 years.
How does that look today.
And everything that change and all the moving parts of the business.
Yeah. So thank you for the question.
We feel good about what we've done and hospice as you know we went out of about 2 years ago and started buying up hospice and went from the eighth largest for the third largest hospice spending about $700 million.
To a buildup of our presence and hospice, we even did a deal of Sarah Kerr during Covid.
I think what we're seeing here is 1 when COVID-19 hit 16 months ago.
Some of the things that we were getting trying to get done out there.
Slightly delayed and then when you add the effects of the relatively short stays that we were getting with the COVID-19 patients we were seeing very strong.
Admissions, but we were seeing day is going down by 33%.
In terms of median days from 2016 to 18.
So just long term, we feel very good about it.
The key thing is we got a pretty good strategy. Our strategy is obviously the higher BD were.
We're seeing progress there, particularly and in July so we're seeing very good solidity, there, we're seeing reduction and turnover probably in May we saw our worst months April may.
Getting better and June now July is good people are going back to school and we believe theres some solidity there.
And in general.
We're seeing admit admittance improve people settle down but it's what we what we experienced between February and May.
It was a real drop off of.
And frankly, you're asking people to change behavior and come to work.
And put the necessary time, and when they've been just taking orders and.
At home and we found that that was the big challenge. The other thing we're going to be work on there is really 3 things, we're going to be needing to do 1 hiring more people to retaining better people just NBD I think for performing really well clinically and really well operationally so isolate our problem to just the area of BD growth and.
And that seems to be looking better and the other thing is we have due to the acquisitions from low ADC hospices. We of 54. We've identified these 50 for as places, where we're going to have to really dig in and.
Get the ADC up so that we can get the economics in place. So in general we're still looking at.
Hospice growth and.
And in general at between 6 and 7% CAGR for.
For the next 5 to 7 years. So it's a great business, we love the business, we provide extraordinarily good care and we run the business as well.
The problem has been our growth has been obviously erratic and Q2 and thats kind of play throughout the year.
2022, I would say.
Looks a lot better in 2023, obviously much much better I don't know Scott anything you want to correct me on.
And I think you hit it I mean, I think our ability to continue to grow EBITDA.
Comfortable with that I mean, I think that certainly and you look on our acquisitions and CCA towards and absent Covid, it's probably a little behind where we wanted to be but its really performing extremely well so as of <unk>.
We had great growth there great growth and are as we've talked about and our home health business and about 20% and net volumes, we had 21 Medicare and so all of that is exceedingly strong and we continue to push on that and.
Get some nice numbers into next year, we just got to rebuild and the back half here from an ADC perspective.
And we expect to do that by the end of this year.
Got it and then I guess for Chris you touched a little bit on the action plan, but maybe just if you can give us your perspective on kind of like the cadence of some of these moves that you're making in terms of when we will see some of the benefits as it relates to the ADC and kind of like what metrics Youre looking at to say, Okay. We are.
Hitting the goal is to get back on track.
Just a little more detail on the action plan to turn the business around and also keep the growth healthy on the home nursing side.
Sure Yeah, Hi, Brian.
In terms of kind of the metrics, we look at obviously.
Sales calls drives referrals, which drives and unmatched.
And.
Sales calls as a function of the productivity of your sales reps and we've been very clear it takes a certain number of reps on making the right number of calls to the right accounts to generate the phone ringing debt.
And it turns into 2 includes interest admissions, we identified coming out of the Q1 into Q2, we were behind the Ftes.
Little bit of that was because we had such a strong Q4 and actually the first part of the Q1, we were seeing great productivity out of our reps, but most of that was kind of inflated due to due to the pandemic and tell the related adverse.
So Tom.
Target and the goal was to really grow the BD force in Q2 going into Q3, and the kind of getting on track for Q3 and Q4.
We carry for 76 into the year, we carried for AED into Q2 expected to grow that significantly, but we only exited Q2 volume in Q3 of 4.9 which was a disappointment for us so the driving.
Factors there was.
And on Spike and our turnover of BD turnover and Paul kind of mentioned some of the things that was driving NAV as well as just making sure that we're getting a few of ours.
And I'm happy to say that now, we're making strong progress by the site today and growing.
Turnover has ticked down since our peak in May so.
What I'll watch every day is kind of how we're doing in terms of bringing our reps on and maintaining our reps and growing our force and if you.
You think about right now to day, 25% of our reps have been here 6 months or last 41% of been here less than 1 year those of the formative periods for for ramps and productivity. So as we age those deeper into tenure, we should see additional pick up and that should actually add to the overall productivity of our.
So our goal is the and this year well over 5.5 <unk> 30, maybe even up to 550 the.
Page 4 on we can get debt and <unk>.
Making sure we're adding them on the right and markets and that should generate debt the referrals and hence the the AG business and we need to be on track sequentially I just.
On paid off the back half of the year like yeah. So I think youll see sequential ADC improvement in Q3.
Over Q2, but flat to negative slightly down.
If we if we had any internal goals for Q3, but impressive admin and ADC growth and Q4 going into going into 2022, and just keep in mind that that add net growth. If we should generate and Q4 of which I think will be will be respectful.
And it's relatively speaking there's going to be against a heavily insulated to for comp from last year, where we had 200.
Covid related add debt, we don't expect to get but depending on the on the delta could happen again, but.
Army courage for how we're going to and this year of how we're going to basically move through the second half on <unk>.
And the plan.
Now on a matter of functions basically every day of executed on it.
Awesome. Thank you.
Thanks, Brian.
Thank you. Our next question comes from Matt Larew with William Blair. Please proceed with your question.
Hey, Matt.
Hey, good morning.
I was hoping maybe with the the EBIT guidance reset here for 2021.
You could just kind of remind us sort of help walk us through the moving parts for 2022, obviously dismiss the question coming back the hospice that haven't seen discussed Contessa and play.
And might just be helpful at least for me.
And kind of hear what youre seeing on the moving pieces for 'twenty 2.
Yes, I mean, we can always we'll start with the kind of the topline reimbursed and which always drives everything there for 2022 as we move forward I mean, right now and we expect sequestration to the to go away, which we.
And we'll see what happens we were surprised that it was extended during this year. So we'll see right now on the surface, we're looking to get a somewhere around a 2% rate increase here and hospice effective October so that's going to be a positive the whole.
The health rule that came out is not final is around $1..7 are tired of modeling kind of puts us close to around the 2% number we'll see once that gets finalized. So I mean, that's certainly the big drivers for US I think as we move into next year. The continued development around our hospice.
The ADC issue will certainly help the.
And the comps should be favorable for us around there so that'll give us some expansion because as I've said in my prepared comments we've added.
Cost of that that segment in order to really get the growth out of it. So youll see some ability of expanse and margins around that home health and great shape. So I feel good about us and it's going be a growth story and the growth looks strong there.
PDGF and we've done very well, so theres not a lot of expansion coming out of that I think the opportunities and home health theyre going to be to get our staffing right. We've made good hires and make part of our pressure on cost per visit right now as new higher pay which has added about $2, which youre not seen and those numbers because we've really done great with Empire L P and our and mix, which has offset some of the.
And with the us even given raises the opportunity and if we get those new hires and productive and pulled on that contract or pay which is running at.
Now the year over year about of $4 million additional clip. So that's going to help us there of funds. So I think those of the key drivers I think our cost structure is built out so we'll be mindful of the G&A.
And so then it's going to come back down the top line growth and what we think.
Once we get this hospice right sized and we will continue to push on the home health side as well.
Okay, and then just on.
And on home health, obviously the.
The strong performance and in.
In the quarter, just curious now and some of the.
And carriers stimulus support the smaller providers starting to reverse.
On either from an organic perspective curious, what you're seeing out there either share taking or and the ability to hire folks and then just from an M&A perspective, what the pipeline either you're hearing about the or seen it.
The I'll take the piece on the pipeline and let Chris kind of talk about the hiring of were seeing anything around that from the pipeline perspective, we haven't seen a lot really coming in we do agree I agree with just saying that I think is the stimulus dollars that's going to put.
The money back here in Q4, sequestration going away and Thats going to put pressure on of lots of we expect it to open up.
We've been active and our pipeline regardless of that and kind of just been more aggressive on pursuing targets as I've said before so I see that opening up which will be of great opportunity for us to not only do some deals but also take share just from a possibility of some folks having to step away from their business with credit I don't know if you have some thoughts around the hiring of and how that we feel around that.
Yeah, Hey, Matt I don't think were seeing yet the impact to the smaller providers out there related to <unk>.
Still propped up by a lot of subsidies out there I do anticipate when that actually does pertain to you on the it creates an opportunity for us to absorb care centers as well of staff.
On the hiring environment out there right now just you know, it's very competitive and it's very difficult and it's not the only competitive across our industry, but and obviously hospitals. Other health systems are looking for staff as well so.
And what we see right now some regional pockets out there, where we're having to get very very creative in terms of being able to build clinical capacity.
But we're having good success.
And that is not getting the alleviate itself anytime soon so we've got to continue to stay diligent and find ways of bringing on staff, we still feel like the best thing, we can do and retain our staff.
And grow our staff internally.
Very pleased with what we're doing in terms of our clinical and retention and the pharmacy. The work building out of that so that.
Keeps me optimistic on of our ability to handle our growth that's coming up.
Yes, Matt.
I think 1 of the things that we're going to see is if there is of shake out I think it will it will mitigate and alleviate to a certain degree the labor pressures. So we're hoping that a big shakeout will create some free agents that potentially we can grab so.
Now the cares act is really fundamentally kept a lot of these people in place that we expect it to get.
In general hopefully should buy of some new territories and get us some new staff. So we're feeling.
It can't happen soon enough from our perspective, but we're expecting it to happen and of Q4 into next year.
Thank you.
Thanks Pat.
Thank you. Our next question comes from Justin Bowers with Deutsche Bank. Please proceed with your question.
Hey, Justin.
Hi, Paul and.
Good morning, everyone and we'll just.
Keeping with the labor kind of.
Dynamics and just.
A lot of mixed messages this quarter, but.
And obviously tough out there.
Some of the issues that youre seeing and hospice is that do you think it's kind of isolated there or is are you seeing some similar dynamics.
And and the home health side of the business as well.
I'd say I'd say a few.
I'd say on the clinical side, we're doing phenomenally, well, which is what's important and the big thing all of us that we have clinicians. So I'd say on both sides. We're doing well we haven't felt the pressure, we're feeling it and pockets, but we haven't felt it in a way that it's showing up and our and our financials. So we're going to continue to drive that the <unk>.
<unk> of our recruiting.
Group has been extraordinary we still are very aggressively looking for new things to make sure that we can close the back door in terms of turnover, but that's that's the key where we've seen of change frankly is and the people selling.
And we've just seen and not so much on home health, but in hospice and we've seen some burnout and we've seen some real difficulty transitioning from an at home business, where these folks were fundamentally dialing from their homes.
To actually getting out and the market.
And that's where we saw the spike and turnover, where when we started to push these folks out.
Yeah.
And in March April May and we saw we saw some turnover and.
And that was on it.
That was a surprise to us so we thought they would be anxious to get onto the market. What we're now seeing though is with school starting.
People.
Making the decisions that they want to do it do it and the way that it's going to mean theyre getting out there and the markets. We're seeing a lot more solidity as Chris talked about with our sales force a lot less in terms of people deciding how they want to work where they want to work Covid really changed a lot of People's ideas about work, particularly in business development and sales roles on okra.
And I Miss anything.
Yeah, the only thing I'd add to the Josh on the.
The star.
The difference between home health and Paul It's just right now it's really the compensation of our care centers and my team and you could think about our home health. It's been basically on an organic growth trajectory for the last several years no acquisitions no integrations some de novo's, they pretty much very very structurally just kind of positioned to move through the.
Pandemic and coming out of the pandemic and then you look at the composition of our hospice business of 180 locations more than half of those and in our portfolio for less than 2 and a half years of which more than half of that time has been practically of virtual world.
And we actually would you add.
Actually acquired sizable hospice and the middle of the pandemic. So we had the build out and divisional and regional and area of leadership team for the REIT span of control on the sales side that I think we were a little delayed and doing and probably not as effective as we share with.
And the team is in place now, but it's relatively new and place. So we've got to kind of get to know each other and get get our rhythm going.
Essentially the exact same structure, we have on the home health side. The shift basically we're still just kind of kind of getting familiar with 1 other and coming out of a virtual world and I think the debt just creative.
Turn in our and our our feet on the street debt that we didn't see count on.
Got it.
I have a couple of follow ups on mix then.
The sales force or the structured so are they calling on and on various.
Institutions slash settings.
The.
For or do you have folks that are dedicated to institutions others that are dedicated to community.
Just trying to get a better sense of that and then can you just remind us.
Whether it's admissions or mix.
How you are.
I'm, sorry admissions of days like how that mix compares let's say pre COVID-19 versus.
Kind of where we are now.
Institutional versus community either admissions of days.
Yes.
Go ahead Paul.
Well I would say and I think.
Go ahead.
I would say on the mix starting with that it's really been the <unk>.
Only area that we've seen and still see.
And kind of.
Just the drag on us is in the sea.
And you're moving slides so with.
Smith, <unk>, ILS, which makes up about 25% of our actual volume on a normal day and still does today.
<unk> has been compressed I mean.
Their occupancies are down about 25%.
<unk> year to date in those settings was down about 9% on a year to date. So we're really heavily dependent on the I'm coming back as well as thus far and new opportunities and referral sources, which I think we're doing a fine job.
So in terms of days, if I look at medium length of stay which is kind of the most most kind of telling metric that we take a look at really bottomed out in the January as an organization and has stabilized since April and has been consistent since April back to pre pandemic levels of around 26 days, which is which is encouraging.
And for US. So now it's just a function of the volume coming.
And back to the initial question. The first question is as debt.
And you have specialists, we have hospital dedicated liaisons of focus directly on transition planning and assistance and hospitals, which on which they may only have 1 or 2 hospitals that they actually work with and then we have.
Hospice liaisons, who were also kind of the community based and of our signed a certain number of accounts. So it could be physician's offices could be facilities <unk> ILS snaps could also be.
Kind of other home health agencies of our wells are on home health agencies that they actually spend time educating on the benefit of hospice. So we have a good mix of that.
And I think the basically our segment.
Mix has not changed much.
The most the most encouraging kind of sign out there again is the stabilization of the median length of stay and US building and now our feet on the street and getting to the number we need and we should start to see the volume come with that.
Got it.
Thank you and then just 1 last 1 just on the.
What's kind of like the productivity assumptions for the.
For the segment on the <unk>.
<unk> exit and then.
In terms of margins are.
Are we are we have little more compression and the back half of the year before rebounding in 2022 or are we and a good run rate at this point.
I will take the productivity and I'll, let Scott handle the margin on the productivity side on our reps.
What we expected to get to this year, where we had our initial guide was about <unk> <unk> per month.
And just for reference we were doing about 10 and a half at this per month and Q4 as we rolled into this year.
Obviously with the mix of our reps being newer 25% less than 6 months for 1% of less than a year.
We've seen that come down from about 8 of the house, we have modest expectations for the rest of the year to hit the guided number of about 8.8.
So and we all see.
And with a lot of sites that we should be able to do that and all.
Scott, let Scott address the the margin question.
Yes, I'll take that so generally and historically Q2 has been our best.
And that are kind of all and EBITDA margin here, 15% the strongest ones. So we will see a step down and the Q2 and then the buildup from there and then some of the key drivers of that and this is traditional for us it would move into the second half of the year as we know health insurance all of these steps up and that's the seasonality issue as well as we give raises that those 2 of about $28 million that we face moving into the <unk>.
Second half of the year. So we'll have to build back out of that and client back, but I expect for the year this 15% to be the high watermark.
The kind of recovering a bit into Q, when we get to Q4.
Okay got it thanks, so much for your questions and ill jump back in queue.
Thanks, Justin.
Thank you. Our next question comes from Frank Morgan with RBC Capital markets. Please proceed with your question.
Hey, Brian.
Good morning, I think I'll move on from the BD issue.
I think we've got that 1 now.
Just curious on.
I guess 1 final question when you when you went through this issue back with home health care. Several years ago would you remind me how long it really took the kind of get the BD issue was resolved there and.
Certainly understand it's a different backdrop today with the.
And the effect of your referral sources changing but.
Just remind me kind of how long that process of retooling and getting back on track for the and how long does that take.
Chris you got it yes.
Hey.
Hey, Greg So we identified of the feet on the street issue in Q2 of 2017.
And we.
Took some time.
It was a bigger sales force and we were trying to rebuild we have almost twice the number of sales reps in the home health and we do and offices, but the same strategy and it took about 2 quarters and start getting some traction on that.
And then starting to see the results come through and again and then the key is is that as those reps grow and tenure of their productivity growth and then that's when you can.
And so you get the benefits so as we went into 2018 and.
And we started to see more consistent growth that we were getting out of that staff and so I.
Thank you.
And we definitely saw this we identified this in the Q1 some of our quarter end of this.
Slow progress in Q2, but expect to the stronger progress from Q3, and I expect to see results and Q4.
Got you and then I guess moving on now and just some of these other issues. Obviously hospice was the biggest part of it but you also with Contessa and DNA can you talk a little bit about the timing to breakeven on contessa. It seems like maybe at least from what I. Originally thought of it looks like that EBITDA might be a little more negative but.
Maybe talk about trends, there and the and the path of recovery there would be my next question on <unk>.
About the split Scott, Yeah, and just real quick to make sure folks are clear on what's in those numbers and our debt on that page 23 of the slide deck with the impacts of the contest and DNA at that 12 to 14 range negative 2014, and negative 12.2 million of that is the VNA piece and we'll start with that and I think we're happy about that deal with lots of geography.
<unk>.
A lot of that we expect the kind of get that to breakeven early into next year. So not really overly concerned about that as we've talked about contessa Julia.
Top line sales story, we've got line of sight into that $60 million range of revenue, which we feel good about we've signaled before that we thought it was still going to be of negative 18 million drag into 2022.
And we believe and that I think that's going to be the first half heavy drag and so.
And I think 2020 threes, when we look and the start seeing some.
And some really pull down and that EBITDA loss and kind of sort of heading and the right direction. So.
Feel good about that and learn a lot here through the back half of the year we.
And we had to take down revenue per test as well a lot of that was driven by the delay and a regulatory approval on an acquisition and.
And some other pressures around hiring and we got to get through a little conservatism I think and that contest of guide with Covid when they experienced through the first round of Covid Delta and they had some pressure on the capture rates. So that's something we're being mindful of and I have been out of the market Frank with Contessa.
Calling on people so I'm very encouraged about what I think.
And how I think we're going to do in terms of bringing and clients and the opportunities that thats going to engender, particularly with the large hospital large sophisticated hospital systems and the plans are excited about it. So I think we'll know a lot of in the next 6 months as we go through and make all of our calls and see which ones we can bring.
And.
Got you last 1 here just.
Any early read on.
Any kind of Covid surge impact from the variant so far that youre seeing out in the current quarter and and I guess with all of this going on should we expect.
Any kind of slowdown in terms of the appetite for M&A I mean, we and the phase now where we want to take our foot off the gas and kind of get these issues fixed and assimilated or are we the full speed ahead debt yet thanks.
I think I think and the home health for M&A I think we're going to continue to look for deals and we still have a good pipe.
<unk> can talk specifically about the pipe, but it's still still very good and again I think prices are going to go down when there's a shakeout I think there'll be consolidation opportunities.
So I think we have to absorb and digest, what we have although we are looking at deals the pricing is crazy out there.
And people are paying twice, what we were paying 2 years ago for these assets. So it would have to be very strategic Scott and his team are doing a phenomenal job on de novo's and.
So were we.
We're anticipating launching up to 15 day novo's this year.
So we're continuing the expansion home.
Home health should be the place regional home health very strategic to build out our map and.
So I don't know if I Miss anything.
No you hit it I mean, I think that we feel good about the pipeline of me to Paul's point on the hospice, it's expensive it would be something that we really liked the geographies certainly until the Seo and opportunity.
That makes sense Theres territories, and then wanting to get into I mean, as we've said before the operations of the the hospice segment of our <unk>.
Terrific.
Great EBITDA margins.
The.
The quality so we feel good about all of that and we understand what the issues on the growth and feel good that we can isolate that and certainly home healthy appetite is strong and there are operators that you can see the results of the tremendous so we think they are teed up and ready for for some more.
I guess, Frank just in general for the whole group.
We feel really good about our hospice strategy about how we built it up about how it's unfolding clear.
Clearly we need some work on the BD, but that was the new world. So we're thinking this is bumps not anything that we regret not anything permanent and not anything we can box and execute on so we.
We feel we feel very good about where we are in hospice and we're going to prove it out and the second half of this year through it all.
Okay, and then any color on Covid post quarter.
Oh, Covid, yes, Chris can talk a bit about it we're seeing obviously and low vaccinated.
States, particularly in the southeast where we have some.
Where we see some things on Louisiana, Alabama, Florida in particular.
We are starting to see some access shutdown for our reps so.
And affected us to date, but it is concerning and we're going to we're going to track that but.
And.
The 1 thing I can say is please anybody who's not vaccinated on the call. Please consider it.
It's really important I don't know, Chris any further detail and color.
Other the other than.
On the southeast, particularly like Florida, there's some restrictions out there for <unk>.
We're still going back to the same kind of playbook. The work for lunch last summer during the pandemic in terms of making sure that we're open for business taken about taking those patients.
Possibly can.
The only other thing is we have noticed a ticked up over the last for straight weeks of our own employees that are on quarantine and still not a lot around the 200 today. So that's something we're keeping a close eye on is the exposures are increasing a little bit.
Thank you.
Thanks, Brian.
Yes.
Thank you. Our next question comes from John Ransom with Raymond James. Please proceed with your question Hey.
Hey, John.
Alright.
Just go on and trying to talk about something different.
Your own I mean, we're reaching more stories about just the big time and burn out I mean people have been fighting this fight for.
The 6 quarters now and.
So just curious about some of your stats on your Labor force in terms of.
What are you seeing in terms of like how many.
How many of your own workers have yet to get back from that.
Whats the turnover looked like.
How many times are you having to use and do you think youre going into the snacks, assuming the same burns out pretty quickly. How worried are you about just kind of go on into the next battle with a bunch of troops that are frankly exhausted and burned out.
Yes, good question and I think in general.
Our troops are feeling good, particularly our clinical troops.
And.
The retention has been very good our predictive model that we've built has been working really good and.
And we feel very strongly that.
And that we're doing the right things for example on hospice, we know and this is where we had some burn out but we were able again to use the model if there is over.
<unk> steps and of months and you chance that clinician doubles their chance of turning over so we feel good about understanding this feeding this into the care centers. So again, it's been the clinician retention has been extremely good.
Which as you know which is going to drive this our BD retention in terms of people wanting to go back into the field, just and hospice has really been our issue.
And and.
And again it's.
It's the arent going to anybody else so it's not like there.
Jumping into further hospice of.
And the competitors there theyre just going into different parts of life, and sometimes just thought going back to work.
Yes.
Chris I missed anything.
Just back on the vaccination rates of 1 thing John is that we saw it get to 50% pretty quick and then kind of leveled off and we had kind of geographic.
And just clarity and saw some of the southern states have lower vaccination rates.
What we are seeing now and starting to pick back up on LTE.
The Delta Devry, Inc has got people's attention and.
We're hopeful that we're going to be able to really kind of push that number higher I think of this.
We will tell you that when we do of polling of on our terminal staffed.
It's clearly still a lot of around 20% debt.
Per the opposed to taken the vaccine for various reasons. So our goal is to make sure that we continue to educate and.
The stress the importance of the pointed as for them the families as well as our patients.
And try to get as many of our employees back smooth as possible.
And what we're also seeing John which I think is interesting as.
A lot of the clients now that we're calling on are basically, saying, we want only vaccinated workers, so theres going to be a tension, particularly on home health, which is on a per visit basis.
And if theyre not able to work and so that's going to be significant.
Alright.
I was going to say and the elderly clientele and I'm surprised that they would anybody will see someone who had been vaccinated.
And as surprising for me.
Yes, yes.
For me too frankly.
Okay. Thank you.
I appreciate it thanks John.
Alright.
Thank you. Our next question comes from Scott Fidel with Stephens. Please proceed with your question.
Hi, Scott.
Hi, Thanks, and Hi, everyone. First question just wanted to just actually you get the clarification just on the cash impact on Scott and I know you had you had mentioned that and you catch the number that I just want to make sure I was correct on the 2022 did you say that headwinds and $18 million EBITDA drag and youre expecting for or just wanted to clarify that.
Yes, that's what we originally said and we came out with the right around the deal time that was the numbers, we'll certainly take a look of that again and as we exit this year and reevaluate, but that's that's what we put out today and so I'm just reiterating what we had originally put out.
Okay understood and then just for a real question.
And maybe just the different topic as well.
Interested just in your views here on the.
The the enhanced Medicaid CBS funding proposal.
And the damage of working on the 400 billion over can that Theyre looking to put it to reconciliation and.
And if it does get included in our reconciliation and tactical Lastly gets passed just interested how you guys are thinking strategically about personal care and weather.
Whether that would influence your strategy there and in terms of thinking about maybe.
Sort of that enhancing on you.
The focus on that relative to the current strategy.
Okay, Thank and general Scott Good question and general, we clearly have a small personal care business and.
We have elected to the.
Build build it out through a network versus owning these due to variety of of.
Of things, we believe it's better handled on a local basis and building networks or better so through the network business and then with Contessa as we take care of sicker people.
And we're building out the technology to include personal care.
And so, particularly and sniff and home and hospital at home you will need these types of workers. So.
We think it's a good thing and we think in general it's going to be a good thing, bringing people that might work elsewhere, particularly retailers and restaurants things like that that could come in so we think it's a good.
Again, the integrated anything for integrated care, we love and I think this plays a lot towards integrated care, but it plays towards the lower and where we have very little exposure.
Okay.
Yes, yes.
I appreciate and thank you. Our next question comes from Joanna <unk> with Bank of America. Please proceed with your question.
Thank you thanks for all of the explanation around that.
The higher turnover, obviously, we talked about and a lot here, but just to clarify because the I guess you mentioned.
And you recruited.
And have more staff, that's dedicated for recruiting and I guess, you have new leadership, there, but any particular actions you can take on you taking too actually.
<unk>.
On the right I guess Telsey, Pakistan, you higher and just I guess the.
A quick word E. So so how can you kind of change that dynamic.
Well actually we have our head our chief people officer is sitting in the room with US who was not expected to speak today, but I.
I think she ought to talk about what our recruiting efforts are some of the some of the numbers, we're seeing I'm really happy with what we're doing from a recruiting perspective I'm not so happy about our ability to control turnover on this except July and June.
We're getting a lot happier so we got to close that back door go.
Go ahead on the.
Yes, a good share of <unk> by the way.
Yes. Good morning, Yes, Joanna yes, we've been really pleased day, we've added additional resources, both and people in the.
The different sourcing tools to be able to attract people to the organization both on the nursing side and the business development side. So I feel good about what we're doing on the the top end of the funnel and that our value proposition as a company is resonating in the market and as we've talked about here.
And the travel really has been and business development turnover.
Our our predictive models have served us very well on the nursing side and they've held firm and we've been able to drive the turnover numbers down to great levels and have been sustained and.
And this business development anomaly that that we're working through and that's been our challenge, but yes, we've seen that starting the turn here and.
I'd like to believe that this is the.
And the beginning of the trend and driving those numbers back down to the levels.
That we need them to the App, but we're doing I'd say Joanna we full capabilities, we can recruit between $30 and 40 folks of month and then we are reducing our turnover rates down.
Down to the if we can get from the high teens low <unk>. That's a very good day for us on a net basis and I think of.
As Chris was saying at the beginning of year, we had about 478.
Our reps, we now have about 505 of our target is $5.30. So we're about midway we've got some good amounts coming in I think 20% to 30 coming in.
So we're feeling very good back doors closing I'd like to say of close better, but once we get those folks and their productivity levels are pretty good initially and when we were looking at the productivity levels. Initially.
Pre COVID-19 were about $10 of half.
The per month.
And for our BD folks Theyre now about high eights almost 9 so productivity levels are pretty good the key is getting them and getting them trained up keeping.
Keeping them.
And finding people who want to come to work.
And the field so but in general we have our arms around this and then I'll repeat again.
Where we really need to also focus is getting those 45 and below ADC. The we have 54 of them care centers up.
So the economics of that and the care of ability really starts to kick in so we're putting a lot of extra attention on getting the BD folks in there and making sure they stay and making sure they are bringing and referrals. So we can get above that.
And that ADC level and start to have some real economies of scale kicking.
Alright, and so it's more of just finding the right people I guess that stand and day I guess can deliver I guess the sum.
These calls and Pennsylvania, Michigan.
Yes.
We're seeing we're seeing them and a lot of other from a lot of other post institutional sales force and so we're starting we're starting to see.
Good good good results from there.
The snaps, obviously the people and.
Other places and we're starting to see some from infusion and some of these other places so people will understand what's going on and know how to kick and quickly.
Right.
And I guess okay.
Okay go ahead.
And I think part of.
What we saw in Q2 and in particular as we said the people we hired last year.
Had been at home their whole career with US if you will right and does that and getting back out into the field as well.
It was new and some people.
And that wasn't what they wanted to see people that we're bringing and now the world has opened up so it's and we've moved past that issue. We are hiring people that are out actively selling on the field and they are coming in environments, where where they need to be doing that so I think people on more prepared for.
For what what Theyre going to need to do on a daily basis. So that's ramping up quickly.
No that's great and if I may just I was trying to ask the law.
Last question and also follow up on the.
The same topic I guess unrelated in terms of.
Labor on.
On the nursing side. So you said there are some pockets of.
And of turnover.
Issues as well right, so I guess kind.
Kind of.
Is it similar situations, where it's more I guess related to more and more so to burn out and and the issue that people are just 1 of them maybe with higher amongst the other jobs faster.
I Wouldnt say theres pockets of turnover that we're particularly concerned as I think there is pockets of recruitment that are difficult theres areas, where fighting nurses in this environment, particularly urban areas places like Baltimore Boston. Some of these other places that are very difficult to find nurses.
It can take a long time with open racks and.
And we could grow much faster, particularly in the home health, but also on hospice, if we were able to bring and some of these nurses I think capacity and that.
That's why it's so important we control turnover, that's why we're very happy with our turnover, which is the best it's ever been so we feel very strongly that that's that's good of the key is recruiting just getting.
Some of these folks.
It's a desert and some of these places just to find nurses.
Okay understood. Thank you so much.
Jeff Thanks, Joe and I appreciate it.
Yes.
Yes.
Thank you our last question comes from Brian <unk> with Jefferies. Please proceed with your question.
Thanks for taking the follow up I guess for Scott and Nick just really quickly on the buyback if.
If I recall you had some leftover from the last authorization right and then I guess, Paul up to that would be just how soon are you allowed to be and the market to buy back stock because if I remember correctly and March.
But most of it like soon after the earnings Paul and within 10 days. So just curious how youre thinking about share buybacks here.
Yeah, Thanks, Brian I'll take that and so yes, we spent.
And roughly 74 million and that first half probably bought on average 5 slightly below $2.50. So certainly we were buyers at that range and it.
Certainly we will use that additional 26 million plus at 100 million the be proactive as need be.
And be able to do it as soon as.
And of our window internally opens where we could put something in place to buy as an organization, which will be next week. So we'll kind of evaluate let things settle out a bit and kind of move forward as we need the.
We're certainly bullish on where we're heading really nothing's changed from where we were before other than we've got of fixes top line issue margins of phenomenal. So I feel good about the future of the medicine, certainly long term of Medicine's first of many of 14 years, So I'm certainly long and <unk>.
But I think that the opportunities are in front of us and we'll be opportunistic at this price.
Thank you.
Thanks, Brian.
Alright.
I want to thank everybody today, who joined us on the call and I would also like to again, thank our employees, who delivered a very good quarter. Thank you for for doing this with all the trials and ambiguities of Covid. Please keep doing what Youre doing is great first things first taking care of the people who need us the most.
And if we continue to take care of the people who need us we will always drive.
And we hope everyone has a wonderful day and look forward to updating you on our ever evolving progress and purposeful work on our next quarterly earnings call in late October. Thank you again until that.
This.
Today's conference call you may disconnect. Your lines at this time. Thank you for your participation and have a great day.