Hello, everyone. Welcome to the 41st annual J.P. Morgan Healthcare Conference. It is my pleasure to introduce the next presenting company, Amedisys, and CEO, Paul Kusserow. Perfect. Thanks, Alex. Good afternoon, everyone. Thank you for your patience. I know there's I'm the only thing between you and the bar at this point, so I'll make it to the point. A pleasure to be here and wanted to talk to you about some of the, you know, the one of the things you always come up with at J.P. Morgan is the timing. You don't talk about earnings, so you talk about strategy. I wanted to make sure that we went through some slides in terms of strategy, and then we'll be obviously coming out with our earnings later in the month. I wanted to talk about some of the large demographic things that are actually occurring that I'm finding that, and we're finding as a company that are quite significant. That is, there's a tsunami that's starting to build up in terms of the population. If you see the slide that we have here, you're talking about senior population the growth of the senior population and the group that we serve. Remember, we serve at about 75+, these are the people that we start to serve. Our average age is in the early 80s. When people migrate into this, which you're starting to see in 20-25 and then 25-30, you look at the areas and it's 75-79, 80-84, and 85+. These are the areas, the fastest-growing areas of the population. Okay. This is also the area that clearly as you get older, you cost more. You'll see there's significant spend, increase in spend in healthcare that's anticipated on an annual basis. What's driving that is population and increased growth of chronically ill folks. Again, as you see the 65+ population, you see the cost, the per capita cost of $22,000 with three chronic illnesses. I've been out on the road quite a bit, and that's not unusual for me to visit places where households where there's four or five chronic illnesses. We're moving towards an area where the cost is going up, and clearly that's gonna be an issue as we move forward. What's this doing to home health? It's gonna drive the demand for our services. We anticipate, and we've been doing some work on this. It's gonna be 7+% a year just doing nothing. You'll see very strong growth there. Again, you'll see this for about the next 5-10 years, significant growth. Also, we're the second-largest home health player. We're the third-largest hospice. Some of you might recall when we first started coming here about four or five years ago, we were the 11th-largest hospice. We've been out, very busy growing things organically and then making lots of acquisitions. This is again, we're anticipating hospice growth at this rate. It's probably higher. It's probably into the low double digits. Hospice is actually projected to double the demand because, one, people want this benefit, and two, the agents that are occurring to hospice. This is, it's expected to double. The market size is expected to double in the next 10 years. That's all really for demand, that's a really good story. What has COVID done to us? Actually, what it's done is it's changed the way we work, and it's certainly changed the way nurses work. We're a company of 22,000 people. A large portion of that are nurses and physical therapists and occupational therapists, aides. What you're seeing here is a tremendous growth in demand. What you're also seeing is we're unable to service that demand. The difference in our business that's occurring is before, particularly with Medicare Advantage plans, we would be cherry-picked, we would be commoditized. Now what's happening is we're seeing those folks that want to refer to home health, those referrals are down 15%. We can't service this. While the referrals are growing and the labor pool is either stagnant, we think it's stagnant or potentially shrinking. The other thing is length of stay in the hospitals is increasing because there's no place to go. The other thing, due to length of stay, what's that doing? It's driving, and that's a big issue for the hospitals. What's a big issue for the payers is the cost of post-acute care is going up considerably because not enough people can go into the home. What does that mean for us? It's all about staffing and labor, and we're really good at this. For us, it's going out recruiting, finding, retaining, and making productive our nurse labor force. You'll see with the strategies that we're gonna be committing to, at the end of this presentation, you'll see what we're gonna be focusing on. One of the things is you have to win at labor because the nurses and the PTs are the ones that take care of these patients. Otherwise, this yawning gap, and what drives this yawning gap, what a lot of you are afraid of, that's why our stock is where it is. One of the two things you're afraid of is labor costs. The other one is regulatory. If we talk about those two issues, labor is starting to dissipate, the inflation, particularly in nursing. We're really focused now on closing the backdoor of turnover and making sure our recruitment machine is driving more people in. That's gonna be our primary focus. From a regulatory perspective, there were some cuts. It was a 0.7% increase this year, but that wasn't really much of an increase. We're out in Washington making sure that the folks at CMS understand that we're anticipating with the market basket that they'll start to update the market basket. Potentially, if they do go for a cut, what we're thinking at this point is that the market basket will be a good size. We're thinking that it won't be 0.7%, it'll be slightly better than that. We feel good about that. That is a bad case situation, we're thinking that it'll actually be better than that. CMS, the government is starting to understand the value of care in the home, and hospitals are starting to realize that they have a discharge planning problem. The plans are starting to realize that they need to start to cut new deals with us in terms of taking their patients. We talked about the nurse supply here. It's gonna get worse. The name of the game is on retention again. The name of the game is bringing... There's about 6 million nurses out there, about 3 million of them are actively performing clinical work. We have to get our fair share of nurses, and we're a very sophisticated recruiter of nurses. I think for this, it's gonna be actually play in our favor. I think we're in a, we've been able to drive recruitment much better than our competitors, and our retention numbers are better than our competitors. We talked about length of stay and what that's gonna do to the whole healthcare system, particularly, again, when you're a hospital and you're trying to discharge somebody and there's no one that can take them from home health, what do you do? You move up the line. You send them to SNFs, to ALFs, to IRFs. That's gonna drive that plan's post-acute costs up. We're at the point now where we're starting to go back to plans and say, "We can provide capacity for you, but you're gonna have to lock in pricing. You're gonna have to do things what we call case rate pricing. You're gonna have to show up and guarantee pricing to lock things in. You're gonna have to go by our utilization rules. We're starting to have good conversations there. One of the things I think it's very important for as you're thinking about our business is Medicare Advantage is growing, fee-for-service is flat. Most of our money is made in fee-for-service. We like that better. It's easier to take care of folks. Medicare Advantage, though, is growing disproportionately. The key is if you can deliver really good outcomes and stand by and take risk on some of those outcomes, you can do very, very well. It's a fragmented business. The way I like to think about this in our business is that fragmentation when there was ample labor out there is people took advantage of the fragmentation, but that's coming to an end right now. People want to make sure that they lock in good players in home health. What is good? It's the highest quality provider. We're the highest quality provider. We have the top star scores, and our preliminary hospice scores were also at the top. What we find is quality begets quality, and we find we get more referrals, we grow our volume faster. It's also easier to recruit good nurses that way. While there is fragmentation, we believe that we'll continue to drive growth. I think the other thing that is important for folks to think about is, what do we actually do? I think we are very different than most of our competitors, very different, and I think more diverse than the rest of the world. A lot of it is I think because of several of the management team came from managed care. When we first started this, when I first came about eight years ago, we were primarily a home health company. We're now a home health, you know, still a major home health player, highest in quality. We're a major hospice player. We're moving into palliative care, and that's gone very well for us. We're also a play in the personal care business because we believe that it's important that not everything's clinical, that sometimes you can take care of people best by making sure that their activities of daily living are taken care of. We also recently acquired a company called Contessa, which is high acuity care, again, in the home. The belief is we can take people, we can take hospital admissions away by taking low acuity hospital admissions and bringing them and taking care of them in the home. We can also defer visits to SNF and taking those SNF visits into the home. We recently, hopefully, we're still fighting over the announcement, but we very recently signed a very good deal, with a large blue payer, to do at-risk palliative in the home. We're very excited by that, and that's gonna drive the top line of Contessa quite considerably. We're excited to be able to do at-risk palliative in the home. We think that, again, we're moving towards value, we're moving towards taking risk, which means doing what we say and taking that level of risk to keep people in the home. All these assets that we've been assembling over the past eight years, should enable us to provide more and more opportunities to take risk in the home. Talked about scale. We're obviously quite big. We see about 65,000 patients a day. We've been able to drive the highest level of star scores that's been driving our growth. We're at the top of the referral list because of our quality. Our operations in terms particularly where we're focused on now is staffing and labor recruitment and retention. We're spending a lot of time there when we're also starting to build better capabilities towards Medicare Advantage contracting. We're continuing to drive more and more into the home at higher levels of acuity. We're addressing markets that a lot of other people can't touch because we're doing it on a risk-based process. We talked about, I'm gonna skip through this 'cause I wanna get to the last slide. As you see, we're more and more not just in terms of home health and hospice and the businesses we're in, but we're starting to see more and more of a migration to the home from a variety of places across the healthcare spectrum. One of the things we didn't talk about is the baby boom. The baby boom is the pig and the python. It's the age tsunami that's coming. They're currently between 75 and about 58 years old at this point. Most of the baby boom is moving towards a place where they will require care. Healthcare will become their primary concern. What do they want? They wanna age in place. They wanna be in the home. Particularly since most of them are chronically ill, about 90% of them are chronically ill, you can take care of chronic disease most effectively in the home versus an acute care or an institutional setting. That's what we do. That's what we wanna move towards, taking care of older, chronically ill people with multiple comorbidities and take risk at taking care of them in the home, and move them through the continuum of services. Then work with Medicare Advantage plans and start to take risk and build that, build out that model. As you see, there's tremendous movement into the home. That'll create opportunity as well as competition. We've sketched this out to say, what do we need to drive aging in place? When we first started here, the check was in home health and minorly in hospice. Now as you see, we've gone through the continuum of what it's gonna take to keep somebody safe in their home. Remember, the cost of being taken care of in the home, in SNFs, it's about a third of SNFs. In the hospital, it's about a sixth of a hospital stay. Other institution, it's between a third and a quarter. This is the place where one, you're gonna save money, you're gonna do what consumers want, and you're gonna do the right thing for the type of illnesses that are out there. We've built all these capabilities, and we're gonna continue to work these capabilities and coordinate these capabilities, but we feel very good about the touch points that we have and the capabilities that we're building and developing. This is the last slide and probably the most important. I've got four minutes left. We're gonna do four things this year. One, we talked about labor. That's the most important thing that we have, which is, one, to make sure we bring in... Because of the growth that you've all seen that's out there, because of the high demand for care in the home, we will continue to drive outsides and outperform in terms of recruitment and then retention. We will continue to drive the clinical workforce, we will be coming out with measures. We already have been working through them internally, as you'll see, these measures are gonna drive considerable efficiencies here. We're gonna go back to payers, and the payers are already coming to us. You know we've done a deal with Aetna, a case rate deal. We're having conversations about doing other case rate deal. A case rate deal is basically allowing us to manage capacity and then to give that capacity, so we manage it more efficiently than they can manage it, and then to give that capacity back to the payer at a better fixed rate. We can actually go to a payer, cut a deal on a case rate, and then give them back 20%-30% excess capacity, which is what they need so their post-acute and their length of stay issues don't become a real problem for them. We also wanna find ways to do risk. We also wanna continue to drive hospital at home, SNF at home, and then we're clearly working in the palliative area. We also believe that we have 550, approximately 550 care centers in about 40 states. So I've been out, I spend most of my time out in the field, spending time in these care centers. We believe there's a lot more capacity we can start to drive by taking out administrative, redundant administrative tasks out there and having them just focus on a couple things: delivering the best care, making sure they recruit and retain the best staff, and then making sure they have the right mix of business. Those are the three things we want all these care centers to do. And if they do these three things, we'll continue to thrive. We believe that's where we're gonna be spending a considerable amount of time. The last one that we're focused on is the innovation piece, which is Contessa. I'm really happy with the Contessa acquisition we made. It takes us into completely new territory, and it takes us to where the future is going. It takes us into the area of. It moves us into a total new addressable market, a new TAM. Taking people out of hospitals. As you see, hospitals are very burdened now. They're in real trouble. We can actually make money for hospitals in areas that they would normally lose them by actually taking them off out of their beds and bringing them into the home. Same with SNFs. We also believe that on the palliative side of things, we can go and work with the plans and take away palliative risk. Take away those high, high-cost people, identify them, carve them out, manage them appropriately, and get them into hospice at the right time. That's something that we're gonna be doing. Again, we'll be announcing that soon. The other thing that we believe with Contessa is we see very, very high demand for this product. We're in eight relationships now. We'll probably land a couple more. The question I think there is, and these are really marquee places. The key for us is to start to go deep on these clients. We've announced some new deals with Baylor Scott & White, with University of Arkansas for Medical Sciences. You know, we're in the Marshfield Clinic, Mount Sinai. We're doing work with, you know, Prisma. We have the really good people out there, the great, you know, marquee names. The key for us. Now Highmark, another example. The key for us is to prove this out and show how deep we can go, as well as, you know, continue to win a couple new accounts a year. We're very excited about that, and we think, you know, we're gonna continue to grow the revenues and get this to break even as quickly as we can. We're very excited about the possibility of this palliative. We'll be talking a lot more about that. With that, I'm going to. I'm slightly over, so I'm gonna shut up. Alex, you wanna ask us some questions, or I can continue to riff, as you can tell, for as long as you want me. No. Absolutely. Just one question to sort of kick off Q&A. Could you just speak a little bit about your thoughts on the long and short-term prognosis for Amedisys and the home care industry as a whole? Mozart would love your pronunciation of our company, thank you. The key for us is there's some near-term changes that are occurring in the industry. One, the availability of home health is going to continue to be, I think, the definer out there. That will bring managed care to the table, I feel very good about that. From a regulatory perspective, we've been getting very good reimbursement from hospice. I anticipate we're gonna have a good fight on our hands this year with home health, I think we'll come out of it quite well. After that, it looks really good in terms of our ability to look at future reimbursement growth. Again, we're having very good conversations with Congress, We're having very good conversations with the administration, CMS, about the importance of home health. They get it. we're feeling really good about... Then there's also, frankly, scarcity. I mean, again, you saw how much, how many, what the issues are with having the capacity to fill the needs for home health. Remember, there's three big players out there. There's us, LHC, and Kindred. LHC and Kindred are going away. We're the only ones left, and they'll absorb about 11% of the capacity that's out there in the market. I don't know what Humana and United are gonna do with them. That leaves a lot more demand out there in the market. I think that that'll play into our advantage, particularly as we're negotiating and looking for partnerships with other payers as well as United and Humana. Great. Thank you. Does that answer your question? Yeah. Good. Are there any questions immediately from the audience or anything? I'm standing between you guys. Okay. All right. I'll buy you a drink for that. Just kidding. Hello. Hey, thanks. Could you talk a little bit about the impact that, sort of the introduction of conveners? Yeah ... some of the, sort of the way payers have come to introduce sort of the concept that your company's building towards have, like, have progressed sort of over time? Yeah. That's a good point. There's four major conveners out there at this point. One, a younger one, but an upstart, and, but the two major ones are myNEXUS and Navi, and then there's CareCentrix. The conveners are fundamentally very classic delegated risk, and I come from Humana, so I'm very used to delegated risk. You give everything over to these people. They manage it for. You give them $0.85 on the dollar, and their job is to go manage that. Conveners are very effective when there's a commoditized product. Most of these folks. My encouragement to the plans has been, where all these folks started was SNF diversion. They're really good at that. They're good at making sure people who are in SNFs actually go into the home, and they save lots of post-acute costs that way. I think the idea is that we're gonna go back to these folks with a non-commoditized business where demand is the big issue, we're saying you need to change your game. Let's lock in case rate deals like we did with Aetna. Let's go, let's go more at risk on things and get them to migrate further. I think if they stay in just the delegated game, I think eventually people are not gonna sign up with them. I think it'll really hurt their ability to access home health because there is a market reality out there which occurs when somebody's not getting paid well or they're getting, that just occurs where business that's tough business doesn't get taken up as well as really good business. If the conveners continue to push on really very difficult pricing and managing visits where they don't really have the knowledge of producing the best outcomes, it's gonna be hard. If they build up the capabilities that we don't have, God bless them. Right now, I can take better care of the plan's patients than a convener can. That's the conversation we've been having. Did that answer your question? Yes. Okay. Yeah. If they don't change, I think their day is coming to an end. Hey, Paul. Since we're cashing in questions for drinks, I'll throw one out. Okay. Can you just update us on the progress that you've made for your initiatives on the labor side, and if it's kind of too early to start to see improvement on that for home health specifically? Yeah. When, when can we start to see improvement in any of the metrics that you're looking at, whether it's net hires or retention or turnover? Well, sadly for you all, the one thing that's really gonna help us the most is a recession. Labor, clinical labor works anti-cyclically from a recession perspective. When the economy is good, people leave, particularly in nursing, 'cause nurses, 85% of the workforce are women. They actually leave a fair amount of them leave the workforce. In a recession, they come back in fairly strongly. We're seeing people come back in. That's just a function of the economy. It's nothing we're doing special. We're seeing a lot of good improvement. We're seeing, particularly on the recruiting side, we saw a real paucity. We saw a real drop-off of people coming in. We're now, we've now developed some new methodologies of sourcing that's bringing people in better. We also are a very simple thing we're doing now is changing incentives. 550 care centers, they're run by something called a DOO, a Director of Operations. They're the CEO of that care center. We're making sure that those DOOs are incentivized, so their bonus is dependent on turnover. It's a surprise. When that starts to occur, there's a lot of opportunity there. They also recruit people, and they accept people more, much more carefully, when they're dependent on turnover. We understand that there's a lot of stability there. Most of our care centers, about 80% of them do a really good job. About 20% we need to work on in relatively high competitive areas where we see people turning over. The other thing that's really important for us is I think our entire business, frankly, you're now getting Paul one-on-one on healthcare, is I think if there's one measure I look at every day, it's turnover. We're a human capital management business. We're a staffing business, basically. If we don't have great staff who delivers great quality, we don't get the productivity, we don't get the outcomes, we don't get the efficiencies that a great staff delivers. You know, we are very, very serious about this business, and that's something we're gonna really continue to drive. Our turnover results are getting better. Our goals for this year are to bring it down between 20% and 30%. I think we can hit those. We will all die on the hill making sure that that happens. Should wage inflation be less of a headwind. Yes. in 2023 versus 2022? Yeah. We're seeing less. Yeah. It's calming down a bit. We're just seeing less irrational behavior that we used to see with moving people moving around for ridiculous pay packages. What we're finding is if you look at the nature of somebody when they go for, you know, a contract labor job, and you look at what, you know, nurses and therapists really want, Pay is number four. The first thing is, do I have a great manager? Mm-hmm. That's what we have to make sure of. That's why turnover for the manager is really... I view that as, are they running a great shop if people are not turning over? The second one is, do they feel like they're a member of a team? Which is important. Then do we put patient care first, high quality patient care, which we do. You see our results there. Fourth is, do I get paid fairly? We pay fairly, no question about it. Then we're also gonna start to experiment, I think, on making sure that we focus on loyal, good, highly productive employees, and clinical employees versus the short-term pay me just to get a warm body in. We're starting to migrate away from that. That... The care that some of those folks delivered was not worth it. The other thing that we believe is we believe there's some opportunities in what's called a PRN pool, part-time pool. We have large amounts of pools of these folks who don't wanna work full-time, but they're accessible to us on a part-time basis. We have not optimized that pool, and so we think there's lots of potential to bring these folks, incentivize them. That will occur when we have more flexible scheduling. Nick has made an investment in a cool little company, and we're gonna be testing flexible scheduling so that those people that wanna work but can't work on a traditional time horizon or a traditional schedule, these, they will have that opportunity with us. Flexibility, particularly with younger clinicians, nurses and PTs, is increasingly important as more people are moving towards gig type work. We can still get that loyalty, but they want it on their time, and I think they're right. I think we ought to be giving them as much flexibility as possible. Thank you. I got another one, Paul. Oh, good. Thanks, Alex. Obviously, a lot to be excited for and about heading into 2023. Obviously still a lot of uncertainty, albeit improving, as you mentioned. Yeah. as it relates to labor market conditions. Could you just talk a little bit about what you foresee as sort of the biggest hurdles this year in terms of achieving your strategic goals that you've laid out? Ourselves. That's it. I mean, honestly, I think we know what we have to do. I think we have the plans put in place. I think it's a flywheel. You just get working and eventually you deliver, and you deliver, and you deliver. No, I'll back up on that, and I'll say that I think there's tremendous capacity, capability and opportunity with what we already have. The question is, we have to go leverage those resources better. Again, we just talked about PRNs. These are big pools of people that I think we can leverage much better. I think the productivity of some of the folks that we do have, I think is, we can increase that productivity considerably, again, if we can bring flexible scheduling in. I think the labor piece, and I do... Again, quality begets quality. We have worked very, very hard to be the top at quality. Quality attracts quality. What you find is if you're a five-star care center, you're growing at twice the rate of anybody else, which you've already seen the growth rates are considerable, and you're also bringing in very good people because they wanna work at the best place. If it starts with quality, if it starts with hiring really good people, that's where it's gonna go. On the regulatory front, you know, I do think the market basket should be considerable. The CMS has to consider the market back is, and the inflation. The past inflation they have to make up for, it's flattening out now. I think that should be a benefit for us. Again, we're gonna continue to fight any increases that they have. Also, we're very anxious to see their methodology, which they're now required to show us. I think their calculations weren't right. We were very anxious to bring that out in the open. We've been working with some of the our advocates in the Senate and in Congress to start to have, we're potentially gonna try to get some hearings on that front so that this can be exposed, 'cause we do think they're making judgments based on flawed data. Any additional questions from the audience? Okay, the stampede is starting towards... No, I'm just kidding. Again, if no further questions, anything that you would wanna leave us with or closing remarks, I think that would just be helpful. Sure. to wrap up. Yeah. I mean, again, I'm very sanguine about where we are. I'm very sanguine about our business, the potential for our business. I think the growth, the potential for growth here is extraordinary. I think the game has changed. I do think that it's about, securing supply. I think the regulatory headwinds are short term. I think those people who deliver high quality and have the people to deliver high quality are gonna win very well. I think with our Contessa asset, we're gonna play in new markets where no one else can play, and we're gonna be able to take risk, which will enable us to be paid more. I'm very excited about finding out how we can be fundamentally a capitated home health provider, 'cause we'll be the only one that does this, and that's where the future's going. Again, feeling very good about it. Again, I know it's late in the day, so I just wanna thank you all for listening and appreciate it, and we're very excited. Thanks very much.