Kindred Healthcare, Inc. (KND)

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Kindred Healthcare, Inc. (KND)

March 12, 2013 10:15 am ET


Paul J. Diaz - Chief Executive Officer, Director and Chairman of Strategic Development Committee


Bryan Sekino - Barclays Capital, Research Division


Bryan Sekino - Barclays Capital, Research Division

[Audio Gap]

Kindred Healthcare today, which is the largest provider of post-acute care in the United States, and I think we're going to be hearing a lot more about this company over the years ahead and how post-acute care can help us both lower cost and improve quality of care of patients' lives. With us today is Paul Diaz, CEO of the company. With that, let me turn it over to Paul.

Paul J. Diaz

Thanks, Bryan, and good morning, everyone. Great to be here in Miami, my hometown. Let me get started. First, I'll note to you that we will be making certain forward-looking statements, and specifically refer you to our website where you will find our recently issued Quality and Social Responsibility Report and a tremendous amount of information about the company, including our recent financial earnings, et cetera.

And let me now tell you that the quality report gives you a great sense of our strategy. And together with this investor presentation, again, for those new to the company, I think will give you a good sense of our strategic direction and our ambitions and goals.

I'll start with our first goal. We continue to work very hard every day across 46 states and over 2,200 locations to be the premier provider of rehabilitation services and post-acute care in the United States. At a time when certainly health care is challenged and reimbursement is challenged, we continue year-over-year to improve on our quality metrics and continue to deliver on our commitment to shareholders in terms of earnings, and we'll talk about the recently released fourth quarter results.

In terms of our organization, when you think about us, we are the largest post-acute provider in the United States. But increasingly, our focus is being deep and broad and diversified in our integrated care markets. We really see 2 things happening in health care: One, the need to be a partner and collaborate with others in creating more integrated care models and more patient-centered opportunities. And two, the opportunities of size and scale that an enterprise level can bring us in terms of cost reductions, in terms of investing in information technology and other opportunities.

But as you can see, we're quite diverse from our long-term acute care hospitals, our transitional care hospitals, licensed as LTACs, our in-patient rehab hospitals, as well as our nursing and rehabilitation centers and growing Home Health and Hospice business.

Really, there are 3 things that I think we have to be able to do and they are at the core of our continued care integrated care model. We have to be and want to be a leader in coordinating and delivering high-quality care in a very transparent way to our patients and to Medicare and Medicaid and the Medicare Advantage Plans that we work with. We have to be part of lowering health care. And part of the way we do that is reduce length of stay in acute care hospitals. And reduce length of stay in the hospitalizations throughout an episode of care. We'll talk a little bit more about what we mean there, but that is a very important part of our value proposition.

And we also believe that we're at the beginning of a process that will probably extend over the next 10 years of really seeing dramatic change in the way health care is delivered, the way health care is paid for. And so we're leaning into new care delivery models and new payment models and try to develop capabilities to make us more successful and enable us to participate in these more integrated care models.

Today, we're caring for over 0.5 million patients across the U.S. in all our sites of service and all our different service lines, we continue to excel and outperform national benchmarks in terms of quality and outcome.

And then the way the patients and families think about value proposition, we're getting more patients home more quickly and doing it with lower rates of rehospitalizations every day. And again, you'll see a lot more detail around these quality outcomes in our quality report.

Take a -- spend a few minutes about each of our divisions, won't go through all the details here, but we are the largest operator of transitional care hospitals in the United States, as our hospitals are licensed as long-term acute care hospitals and increasingly a growing inpatient rehab facility business. We have 6 freestanding inpatient rehab facilities today, a number under development. But also operate an acute rehab unit business that is quite successful within our rehab care division, and we'll talk about that.

But our Hospital division continues to outperform, and I think you'll see in this first quarter the benefit of what was a pretty strong flu season, a pretty strong start to the year in our Hospital division here in this first quarter and as you saw in the fourth quarter of last year.

Our Nursing Center division. This is really a tale of 2 stories here. On the one hand, very challenging environment, particularly on the Medicaid side, given, really, the lack of growth in Medicaid reimbursement for skilled nursing facilities. And on the other side of the spectrum, our newer subacute type facilities, our transitional care facilities that we're finding great success, where our new facilities are returning patients home in 20, 25 days with really great outcomes. And so I think what you'll continue to see over the next few years is a real commitment to our transitional care centers and subacute business. And that subacute business is sometimes within our transitional care hospital, but a movement away from more traditional Medicaid skilled nursing facilities and, again, are fairly challenged in today's reimbursement environment.

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