Though its temporary bonus program has ended, VITAS Healthcare has built on the momentum it created with accelerated hiring and corresponding gains in capacity.
VITAS is a subsidiary of Chemed Corp. (NYSE: CHE). The bonus program, which ended in July, included a one-time retention payment that ranges from $2,000 to $15,000 per employee for nurses, nurse managers, home health aides and social workers who completed at least 12 months of employment.
These efforts have contributed to a growth spurt during 2023 that continued into the third quarter of the year, according to Chemed CEO Kevin McNamara.
“VITAS’s improving operating metrics are a direct result of our retention and hiring program launched July 1 of last year,” McNamara said in a Q3 earnings call. “This program was designed to stabilize turnover and our tenured staff and expand patient capacity. Since July 1, 2022, our staffing has methodically increased on a sequential basis over this 12 month period. This increase in staffing and related patient capacity has been converted into increased admissions and census in roughly 60 to 90 days.”
Over the bonus initiative’s 12-month period, VITAS brought on a total of 784 licensed clinicians, the majority of which were nurses. During Q3 alone, the company has hired 157 licensed professionals, even though the program ended in July.
This spate of hiring has propelled growth across a range of performance metrics.
For example, the company’s average daily census rose 9.4% to 18,859 in the third quarter, and admissions increased 7.5% to 15,774. These factors helped to generate a 12.5% year-over-year increase in net service revenue, which reached $334 million in Q3.
Other contributors were a 9.4% increase in days of care, shifts in acuity mix and this year’s 2.7% increase to the Medicare base rate.
Adjusted EBITDA, excluding the Medicare payment cap, saw a 63.1% jump from Q2’s results at $42.6 million.
“We’ve now generated five quarters of sequential growth in licensed health care workers and four quarters of sequential growth in [average daily census,” VITAS CEO Nick Westfall said during the conference call. “We’ve developed what I believe is a very sustainable path to methodically build our clinical capacity and patient base to pre-pandemic levels and beyond.”
Companies featured in this article:
