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Kindred Healthcare Inc. (KND)
Credit Suisse Group AG Healthcare Conference
November 14, 2012 4:00 PM ET
Benjamin Breier – President and COO
Greg Miller – Chief Development Officer
Jonathan Chan – Credit Suisse
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Thank you, good afternoon everyone. Thank you all for being here. Before I get started just to remind you, we will be making some forward-looking statements. You can find our presentation and most of our information up on our website www.kindredhealthcare.com and we encourage everyone to go online and review our information at your best availability.
Let me start first if I could by talking about our business mix and our provider mix in terms of what is our business today. Our business today consists of about 45% long-term acute care hospitals what we call transitional care hospitals, a little over a third skilled nursing of 20% within our rehab business and the small 2% within our homecare. Just as a play setter and to remind you of where we’ve been, if you look back at our business mix 2010, you would have seen a nursing center business that was operating around about 50% of our portfolio.
And we have been working hard on repositioning our business mix to move away from long-term care side of our business into a more short stay, more acute, more rehab intensive, more better cost of capital business, we expect our home care – our nursing center business excuse me, probably to be somewhere in the 20% to 25% range as part of our entire business mix by 2016.
You can see the percentage of our business that comes from Medicare and commercial. Right now today at Kindred about 30% of our business is commercial business, almost $2 billion of revenue that we derive from insurance companies that’s the fastest growing segment of our business. We expect that you will continue to see that growth.
We are spread across the country and we have a large diversified base. We are doing business in 41 states, but we believe fundamentally and something that we call an Integrated Care cluster market strategy. You can see the circles on the map and they represent 20 to 25 markets where we are deploying a full asset based the post-acute assets from LTAC to Transitional Care Centers to HomeCare and Hospice, but we want to go deeper and penetrate harder into those markets.
You will continue to hear about portfolio rationalization and capital structure changes within our company over the next couple of years. All designed to put more assets in these circles, in these Integrated Care markets, so that we can develop deep partnerships with payers and with health systems across the country in the markets that we serve.
And we have really three specific value propositions around are Continue the Care campaign. The first is that we want to help better coordinate care through transitions. One of the hardest times people have today is that when they leave a hospital and they move into an LTAC or sub-acute unit getting from one setting to another, following their transition is something that we’ve gotten very good at and then we want to continue to get good at. We also want to make those transitions happen not only in the quantity location, but we want to do it at the lowest possible cost point at the best price.
We think high quality and low cost is ultimately what the solution is to the spending problem in the U.S. Healthcare economy and we want to be right at the center of that as a solution. The second is that we want to help lower those cost by reducing both lengths of stay in our acute care hospitals throughout the episode. And then last we want to reduce hospital readmissions.
We believe fundamentally that by reducing length of stay and getting people home faster, we have intensive rehabilitation that we can provide and with interdisciplinary teams, who are providing care to older sicker patients that we can both reduce length of stay and get people home and ultimately that they can get home at a qualitative manner and not get return back to the hospital, which as many of you know is the costliest part of the healthcare system, those patients that get returned back to the short-term acute.
Just a couple of interesting statistics I think, if you think about the makeup of our company, we will have seen over 0.5 million patients over 2,200 sites of service over the course of 2012. We have just recently done a patient satisfaction survey, family satisfaction survey where we returned a 92% of the patients and families that came to our services would recommend them to a friend and we’re satisfied with their care and we continue to outpace all of the quality benchmarks that we compare ourselves to in all four of our business lines.