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Brookdale’s Home Health and Hospice Businesses Are Looking to Grow

Posted on Friday, August 12, 2016 3:06 PM

Brookdale is the nation’s largest senior living provider, seeking growth for both its home health and hospice businesses.

Brookdale’s second quarter of 2016 saw “the beginnings of a recovery in [Brookdale Senior Living’s] ancillary business,” Brookdale Senior Living (NYSE: BKD) CEO Andy Smith said in a press release detailing the company’s most recent earnings.

Last year, Brookdale was the sixth largest home health provider in the country. The company struggled for quite some time, due in part to licensure issues in the state of California.

However, Brookdale has bounced back and now operates about 1,100 senior living communities nationwide.

“We continue to produce revenue growth in both hospice and home health episodes, with second-quarter 2016 revenue increasing by 6.2% year-over-year,” Brookdale CFO Cindy Baier said during the company’s second-quarter earnings call on Tuesday.

Brookdale’s second-quarter 2016 ancillary services segment revenue totaled $123.3 million. Also, the ancillary services operating income for the second quarter of 2016 totaled $19 million.

“We are pleased with the progress we have made in growing this business, and focus on labor productivity and labor management disciplines,” Baier said.

Brookdale experienced some controlling labor issues in the fourth quarter of 2015. However, the president of healthcare services was given the credit for executing the turnaround.

“Anthony Mollica and his team have done a great job of really controlling labor,” Baier said.

Brookdale is also actively exiting markets in outpatient therapy as it tries to grow its home health and hospice businesses, Baier explained—particularly in California, where licensure laws have long prevented the provider from expanding its home health and hospice reach.

“We have now obtained a good number of the required regulatory permits for California, and [we] will work to expand that business,” she said. “We project the expansion into our communities with these new licenses represents approximately $5 million of potential annual revenue over the next 12 months or so.”

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